liquidation

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Related to liquidating: Liquidating dividend, Self Liquidating

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 ?
If no gain or loss is recognized on a liquidating distribution, the member's aggregate basis in the property received equals the member's basis in his or her LLC interest just before the distribution, reduced by the cash and marketable securities distributed (Sec.
CO: FirstCity Bancorporation of Texas, Inc.; FirstCity Liquidating Trust ST: Texas IN: FIN SU:
If the stock of a liquidating subsidiary is owned by more than one member (e.g., the typical mirror transaction structure), section 332 will apply to all owning members.(135) Without great elaboration, Prop.
Table 1 Retention Dividend yeild 8% of $20 million $ 1,600,000 Less 70% dividend received deductions 1,120,000 Taxable income $ 480,000 Corporate tax 34% 163,200 Distribution ($1,600,000 less $163,200) $ 1,436,800 Less 28% shareholder tax 402,304 After-tax return to shareholders $ 1,034,496 Liquidation Liquidating distribution $ 20,000,000 Less tax on distribution Section 331:.28 ($20 million - $5 million 4,200,000 Net proceeds available for investment $ 15,000,000 Dividend yield 8% $ 1,264,000 Less 28% shareholder tax 353,920 After-tax return $ 910,000
Also, the fund said that it expects to make a final liquidating distribution on or about 23 November 2018 to those stockholders who held its shares as of the effective date.
331 governs the tax treatment of liquidating distributions at the shareholder level.
Three creditors of the chain have filed an involuntary Chapter 7 liquidating petition in Los Angeles Bankruptcy Court, claiming they have not been paid.
Prior to 1986 law, a corporate distribution of property, whether a liquidating or a nonliquidating distribution, produced neither gain nor loss to the distributing corporation.
American Capital Senior Floating Ltd (Other OTC:ACSF) on Tuesday disclosed that related to the Plan of Complete Liquidation and Dissolution of the company (the plan), its board of directors authorised a final liquidating distribution of USD3.69 per share.
Global Banking News-September 11, 2018-American Capital Senior Floating declares final liquidating distribution of USD3.69 per share
Between May 2, 2016 and May 5, 2016, the fund will be in the process of liquidating its portfolio assets.
The liquidating corporation's tax attributes (including net operating losses, earnings and profits, and capital losses) carry over to the foreign corporate shareholder under Sec.