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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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.


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.
Collins Dictionary of Law © W.J. Stewart, 2006

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

A Law Dictionary, Adapted to the Constitution and Laws of the United States. By John Bouvier. Published 1856.
References in periodicals archive ?
Minister Molale narrated that government took a decision to put BCL under final liquidation on June 15, 2017 and that in February 27, 2019 the same decision was taken to place Tati Nickel mine under final liquidation.
In Iran, the liquidation of dead merchant's debts, either insolvent or not, is implemented according to the Bankruptcy Law, and no bankruptcy judgment is needed.
Whether a corporation has had a de facto liquidation is a subjective determination based on case law.
According to UHY Peacheys, the number of liquidations would be higher but for support initiatives introduced by the Welsh Assembly Government, which have helped struggling companies stay afloat, and in part thanks to Wales' reliance on the public sector.
In October The Comfort Food Company, based in Pudding Chare, Newcastle, went into liquidation, owing more than pounds 100,000.
Of these 1,428 were compulsory liquidations, a rise of 30 per cent on 2005, and 2,011 voluntary liquidations showing an increase of ten per cent on the same period.
In both genuine contraction and retention/termination partial liquidations, neither investment gain nor interest earned on the proceeds pending distribution can be part of the distributable partial liquidation amount.(3) If these amounts are in fact distributed, they will be treated as dividends.
That the redemption be in partial liquidation within the meaning of section 302(e).
Further investigation of Subchapter K dissolves the facade of simplicity, as numerous parts of Subchapter K can come into play on a liquidation of a partner's interest.
The basic reason for the above steps is that if a liquidation turns hostile (where a transition between creditor and debtor is not smooth), gathering good and timely information could be difficult.
In addition, new section 367(e)(2) regulations affect liquidations under IRC section 332.