Liquidation

RECENT NEWS
The Economic Times  Dec 13  Comment 
A high court order has provided a lifeline to a small company which could have been pushed to liquidation.
The Economic Times  Dec 8  Comment 
The promoters of the company did not submit resolution plans while it defaulted on a loan of about Rs 80 crore, where SBI has 95% exposure.
WA Business News  Dec 5  Comment 
Major Perth architecture practice JCY has been placed into liquidation after being hit by the slowdown in work volumes, pricing pressures and losses on the Perth Children’s Hospital.
MarketWatch  Nov 29  Comment 
The Trump administration doesn't plan to recommend stripping regulators of their power to seize and unwind a failing financial firm in a crisis, the Wall Street Journal reported Wednesday, citing people familiar with the matter. Maintaining this...
The Economic Times  Nov 28  Comment 
Typically, when a company goes for liquidation, permanent employees, part-time workers and outsourced members of the staff are affected.
TechCrunch  Nov 28  Comment 
 No one ever says hardware is easy, and today it looks like another promising startup has hit a wall. Navdy, which made an in-car heads-up display that projected info like navigation on to your windscreen, has been sending out notices to...
The Economic Times  Nov 24  Comment 
Trade creditors, primarily small firms, and vendors could also be affected.
BBC News  Nov 23  Comment 
Customers urged to contact their credit card company to see if they are eligible for a refund.




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Business Liquidation

The process of selling assets for cash.

This situation generally arises when a company can no longer carry out it's business as intended, by making profits and, share holders do not have any chance of gaining from investing in the company.

The cash generated out of liquidation is usually spent on reducing debts that company own to its lenders.

For example, Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008 and now in Jan 2009, Barclay's [which took over Lehman, LEHMQ:US] is in the process of liquidating it, though Lehman has a couple of trillion dollars in assets.

Winding up would mean liquidating the assets of a corporation or partnership, settling accounts, paying bills, distributing remaining assets to shareholders or partners, and then dissolving the business. Winding up a non-profit corporation requires a plan for distribution of assets to some charitable or other non-profit entity. [1]

Investors Liquidation

Liquidation is the conversion of assets into cash by an Investor getting rid of a position in a particular type of security. [1] When Investors convert assets into cash for there own personal accounts, they may have no reason too convert, and may spend the proceeds on whatever they want, whenever they want.

Liquidation is simply the conversion of assets into cash, liquidity refers to how quickly you can convert your assets into cash. [2] For example, a portfolio manager might decide to liquidate a position in a stock by selling all the shares of that stock held in the portfolio. [3]

c.1575, "to reduce to order, to set out clearly," sense of "clear away" (a debt) first recorded 1755. The meaning "wipe out, kill" is from 1924. [2]

References

  1. Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott Accounting Professor ISBN-10: 0618176519 pg 212
  2. Stock Investing for Dummies‬ By Paul Mladjenovic pg22 ISBN-10: 0470401141
  3. Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. ISBN-10: 0618176519 pg212
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