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The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts.

A type of proceeding pursuant to federal Bankruptcy law by which certain property of a debtor is taken into custody by a trustee to be sold, the proceeds to be distributed to the debtor's creditors in satisfaction of their claims.

The settlement of the financial affairs of a business or individual through the sale of all assets and the distribution of the proceeds to creditors, heirs, or other parties with a legal claim.

The liquidation of a corporation is not the same as its dissolution (the termination of its existence as a legal entity). Depending upon statute, liquidation can precede or follow dissolution.

When a corporation undergoes liquidation, the money received by stockholders in lieu of their stock is usually treated as a sale or exchange of the stock resulting in its treatment as a capital gain or loss for Income Tax purposes.

See: aberemurder, assassination, cancellation, composition, discharge, dispatch, dissolution, homicide, killing, murder, payment, termination


the procedure under which a company is dissolved (or wound up). Liquidation maybe voluntary (where the company is solvent but where the purposes for which it was set up have been achieved or no longer exist) or compulsory (usually where the company is insolvent). The function of a liquidator is to convert the assets of the company into cash, which is then distributed among the creditors to pay off (so far as possible) the debts of the company. Any surplus is then distributed among the members.

LIQUIDATION. A fixed and determinate valuation of things which before were uncertain.

References in periodicals archive ?
Tim Fisher has openly said this week the club is at a 'tipping point and insolvent liquidation cannot be reasonably avoided'.
Perhaps the most noteworthy aspect of an insolvent liquidation is that, although the transaction can be purely internal and involve no third parties, for technical reasons the intercompany transaction rules might not apply at all.
If there is a prospect of an insolvent liquidation, directors should seek prompt professional advice and ensure the steps they take are properly considered, documented and can be justified.
As soon as the director is aware that there is no reasonable prospect of avoiding insolvent liquidation, or fears that that is the case, he must raise the problem with the rest of the board with a view to taking immediate financial advice.