liquidation

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Related to Members' voluntary liquidation: Creditors 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 ?
Following Cancellation, there will be limited opportunities for Shareholders to realise their investment in the Company other than pursuant to the proposed Members' Voluntary Liquidation.
He is a director of Blue Planet Worldwide Financials Investment Trust plc ("Worldwide") which was placed in members' voluntary liquidation on the 18 May 2012 pursuant to s.
Accordingly, the Company has been placed in members' voluntary liquidation and James Eldridge and Sean Croston both of Grant Thornton UK LLP of 30 Finsbury Square, London, EC2P 2YU have been appointed joint liquidators to the Company.
Further to the proposals for the reconstruction and winding up of the Company which were announced on 28 June 2011, the special resolution placing the Company into members' voluntary liquidation to permit the implementation of the Scheme was duly passed at the General Meeting held earlier today.
Dated: 21st June 2011 Jim Hamilton Liquidator "Please note that this is a Members' Voluntary Liquidation.
Conditional upon completion of the disposal and also subject to shareholder approval, the directors propose placing the company into a members' voluntary liquidation and cancelling the company's listing of ordinary shares on the official list.
It is currently in members' voluntary liquidation and will remain in existence until the final liquidation payment is made to shareholders in 2008.
As part of the deal, shareholders would be required to vote in favour of a members' voluntary liquidation at a general meeting on September 10 and, providing the resolution is passed, the company would then be de-listed on September 13.
Recent highlights include advising Deloitte in relation to a number of members' voluntary liquidations, and acting for the administrators of MT2000 (Extrusions) Ltd in the sale of its business.
Several were wound up in members' voluntary liquidations, so that shareholders paid capital gains tax, then 30 per cent, on the proceeds at a time when the tax on dividends could be as high as 98 per cent.

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