liquidation

(redirected from liquidated)
Also found in: Dictionary, Thesaurus, Legal, Idioms, Encyclopedia, Wikipedia.
Related to liquidated: Liquidated damages

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 ?
However, it is prudent for an owner to include a hybrid consequential damages clause, combining liquidated damages and actual consequential damages after the expiration of the liquidated damages time period.
The second and perhaps bigger problem was that the lease stated that in addition to the liquidated damage deposit, the tenant was also liable for all other damages including all unpaid rent and attorneys' fees.
Supreme Court recently said liquidated damages stemming from an age discrimination claim filed under the Age Discrimination in Employment Act (ADEA) are not tax-free.
Notwithstanding the substantial logic and appeal of this argument, the court dismissed it almost out of hand by using a form of "boot-strap" argument--despite what appears to be contrary conduct, the owner cannot be said to be "estopped" from making this argument because (1) caselaw permits owners to claim liquidated damages even after the completion deadline has passed and (2) the contract itself provided for the assessment of liquidated damages.
There is a low probability that the senior and first tier subordinate debt service reserve funds will be tapped to pay debt service, except to act as a liquidity facility if there are delays in obtaining liquidated damages.
These recapture provisions may limit the ability of the liquidated corporation to offset capital losses.
Due to the fast pay structure and the number of loans liquidated, the subordination level for class D has significantly increased, warranting the upgrades.
He sued under the ADEA and settled for $145,629; half of this amount was attributed to back pay and half to liquidated damages.
In Schmitz, 34 F3d 790 (1994), the Ninth Circuit decided that such liquidated damages were excluded from income, while in Downey, 33 F3d 836 (1994), the Seventh Circuit decided that such damages must be included in income and therefore subject to tax.
On April 16, 2003, the trial court entered an order granting the plaintiffs' motion for summary judgment on the calculation of liquidated damages under the West Virginia Wage Payment and Collection Act.
IRS Letter Ruling (TAM) 9245004 held that an S corporation that purchased all of the stock of a target corporation and immediately liquidated the target could use the provisions of Sec.
4 million from ILM II as liquidated damages and in certain other circumstances, ILM II would be entitled to terminate the agreement and retain the aforementioned deposit as liquidated damages.