In the simplest terms, this means selling the position for cash; another approach is to take an equal but opposite position in the same security – for example, by shorting the same number of shares that make up a long position in a stock.A broker may forcibly liquidate a trader’s positions if the trader’s portfolio has fallen below the margin requirement or she has demonstrated a reckless approach to risk-taking.The most senior claims belong to secured creditors who have collateral on loans to the business.These lenders will seize the collateral and sell it – often at a significant discount, due to the short time frames involved.If someone wants to buy the estate they’re not in the liquidation business – they’re in the buying business.Don’t hesitate to check with the Better Business Bureau and see how companies are rated.We are a licensed and bonded company, as well as members of the Better Business Bureau.
Every sale is different and we present each as if it were our own.
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. Solvent companies may also file for Chapter 7, but this is uncommon.
It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they come due. Not all bankruptcies involve liquidation; Chapter 11, for example, involves rehabilitating the bankrupt company and restructuring its debts.
If that does not cover the debt, they will recoup the balance from the company’s remaining liquid assets, if any. These include bondholders, the government (if it is owed taxes) and employees (if they are owed unpaid wages or other obligations).
Finally, shareholders receive any remaining assets, in the unlikely event that there are any.As company operations end, the remaining assets are used to pay creditors and shareholders, based on the priority of their claims. The business is no longer in existence once the liquidation process is complete.Unlike when individuals file for Chapter 7 Bankruptcy, the business debts still exist.It is not necessary to file for bankruptcy to liquidate inventory.