Question:

What is liquidation?

by Guest34350  |  earlier

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What is liquidation?

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  1. In law, liquidation refers to the process by which a company (or part of a company) is brought to an end, and the assets and property of the company redistributed. Liquidation can also be referred to as winding-up or dissolution, although dissolution technically refers to the last stage of liquidation.

    Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation) or voluntary (sometimes referred to as a shareholders' liquidation, although some voluntary liquidations are controlled by the creditors, see below).

    In finance, liquidation is also sometimes used as convenient shorthand for converting an asset to cash.


  2. Turning your assets (real estate, stocks, etc.) into cash.

  3. Chapter 11 is Bankruptcy reorganization.  Essentially the company is in trouble and needs time to restructure/reorganize.

    Chapter 7 is Bankruptcy liquidation.  Essentially, the company is such bad shape there is no chance of any "fixes".  The company's assets are sold to pay off its creditors etc...

    WHo gets what and when is based on absolute priority. all this is a field by itself.
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