liquidation

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Related to Creditors' voluntary liquidation: Members voluntary liquidation

Liquidation

Occurs when a firm's business is terminated. Assets are sold, proceeds are used to pay creditors, and any leftovers are distributed to shareholders. Any transaction that offsets or closes out a long or short position. Related: Buy in, evening up, offset liquidity.

Liquidation

The conversion to cash. Liquidating a position may simply mean selling stock or bonds; the seller in this case receives the cash. Liquidation also refers to a situation in which a company ceases operations and sells as many assets as it can; the company uses the cash to repay debt and, if possible, shareholders. Liquidation often has a negative connotation for this reason. See also: Panic selling.

liquidation

1. The conversion of assets into cash. Just as a company may liquidate an entire subsidiary by selling it to another firm, so too may an investor liquidate by selling a particular type of security.
2. The paying of a debt.
3. The selling of assets and the paying of liabilities in anticipation of going out of business.
Case Study If eliminating dividends, laying off employees, selling subsidiaries, restructuring debt, and, finally, reorganization under Chapter 11 bankruptcy fail to resuscitate a business, the likely outcome is liquidation. Early 2001 witnessed the end of the line for Tennessee-based retailer Service Merchandise, a 42-year-old chain of catalog showrooms that proved unable to compete with large discounters such as Wal-Mart. Following a three-year attempt at reorganization under Chapter 11 bankruptcy, the firm announced it would close all 216 stores and liquidate its inventories and real estate. It was expected the asset liquidation would result in creditors being paid only a portion of their claims while stockholders of the company would receive nothing. The firm's stock was trading over the counter for 2¢ per share at the time of the announcement.

liquidation

the process by which a JOINT-STOCK COMPANY'S existence as a legal entity ceases by the winding-up of the company Such a process can be initiated at the behest of the CREDITORS where the company is insolvent (a compulsory winding-up), or by the company directors or SHAREHOLDERS, in which case it is known as a voluntary winding-up.

The person appointed as liquidator, either by the company directors/shareholders or by the creditors, sells off the company's ASSETS for as much as they will realize. The proceeds of the sale are used to discharge any outstanding liabilities to the creditors of the company. If there are insufficient funds to pay all creditors (INSOLVENCY), preferential creditors are paid first (for example the INLAND REVENUE for tax due), then ordinary creditors pro rata. If there is a surplus after payment of all creditors this is distributed pro rata amongst the ordinary shareholders of the company. See also LIMITED LIABILITY, SHAREHOLDERS, CAPITAL.

liquidation

the process by which a JOINT-STOCK COMPANY's existence as a legal entity ceases by ‘winding up’ the company. Such a process can be initiated at the behest of the CREDITORS where the company is insolvent (a compulsory winding-up) or by the company directors or SHAREHOLDERS, in which case it is known as a voluntary winding-up.

The person appointed liquidator, either by the company directors/shareholders or the creditors, sells off the company's ASSETS for as much as they will realize. The proceeds of the sale are used to discharge any outstanding liabilities to the creditors of the company. If there are insufficient funds to pay all creditors (INSOLVENCY), preferential creditors are paid first (for example, the INLAND REVENUE for tax due), then ordinary creditors pro rata. If there is a surplus after payment of all creditors, this is distributed pro rata amongst the shareholders of the company. See also LIMITED LIABILITY, SHAREHOLDERS.

Liquidation

The process of converting securities or other property into cash.
References in periodicals archive ?
Watersports association secretary David Baines said: "The decision has been taken to go into creditors' voluntary liquidation.
Knowsley Transport & Forwarding Limited traded as road freight hauliers between 1990 and approximately July 1999 from Charleywood Road on the Knowsley Industrial Estate North before being placed into creditors' voluntary liquidation on 21 February 2000 with a deficiency to creditors estimated at around pounds 135,000.
In May 2001 four of Corum's subsidiaries, Mortgage Direct, Mortgages 'R Us, Mortgage Direct West and Telemark were placed into creditors' voluntary liquidation and share dealing was suspended.
Browns Group Limited which went into a creditors' voluntary liquidation on 25
There is no equivalent to a creditors' voluntary liquidation for a traditional partnership, although this is available to an LLP.
The creditors' voluntary liquidation is the final part of the administration process and is a technicality to allow a dividend to be paid to unsecured creditors.
The Insolvency Service reported there were 4,082 compulsory liquidations and creditors' voluntary liquidations in England and Wales - a drop of 8.
There were 4,082 compulsory liquidations and creditors' voluntary liquidations in total in England and Wales in the first quarter of 2010 - a decrease of 17.
He has experience of a range of cases including pre-pack, trading and non-trading administrations, creditors' voluntary liquidations, members voluntary liquidations and administrative receiverships.
However, there were 3,047 creditors' voluntary liquidations, marking an increase of 9.
He has experience of managing a wide range of cases including trading and non-trading administrations, pre pack administrations, creditors' voluntary liquidations, members voluntary liquidations, administrative receiverships and LPA receiverships.