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Liquidation

From Academic Kids

Liquidation refers to a business whose assets are converted to money in order to pay off debt.

Liquidation (also known as winding-up) is one of the forms of "insolvency" in the English Courts and is used when the other methods of corporate recovery have failed. There are two forms of Liquidation - compulsory (or Court ordered winding-up) and voluntary (creditors or members winding-up). The purpose of a liquidation is to realise the assets of the company in order that the creditors of the company can be paid off.

Although the initial principle of liquidation was that the creditors would be paid off pari passu, i.e. all creditors would receive an equal share of the assets of the company in accordance with the debt they were owed, there are now a number of classes: debenture or fixed charge holders, preferential creditors, floating charge holders and unsecured creditors.


In terms of people, a liquidation is an execution, especially one carried out by an extra-judicial death squad or a secret police agency such as the KGB.


Liquidation is also the name of a long running night club in Liverpool


In music, see fragmentation.

nl:Liquidatie (financieel) Template:Econ-stub

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