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Forced Liquidation

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Forced Liquidation
An action taken by brokerage houses that offsets and closes all positions within delinquent customer accounts in order to reduce exposure.

Notes:
Forced liquidations generally occur after warnings have been issued by the broker regarding the under-margin situation of an account. Should the account holder choose not to meet the margin requirements, the broker has the right to sell off the positions.


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Advance rates for asset-based lending deals historically were based on the forced liquidation value of the borrower's inventory--how much the inventory would bring if it were sold in bulk to wholesalers, competitors or liquidators.
Forced liquidation value (auction) is a professional opinion of the estimated most probable price expressed in terms of cash in U.
For business owners like William, an estate plan and business continuation strategy can help protect family assets from going towards business expenses, or forced liquidation of the business to cover family financial obligations.
 
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