Liquidating business assets

23-Sep-2019 08:08

They will sell to a company that specializes in store liquidation instead of attempting to run a store closure sale themselves.The parties who are entitled by law to petition for the compulsory liquidation of a company vary from jurisdiction to jurisdiction, but generally, a petition may be lodged with the court for the compulsory liquidation of a company by: The grounds upon which one can apply for a compulsory liquidation also vary between jurisdictions, but the normal grounds to enable an application to the court for an order to compulsorily wind-up the company are: A "just and equitable" winding-up enables the grounds to subject the strict legal rights of the shareholders to equitable considerations.Liquidation (or "winding up") is a process by which a company's existence is brought to an end.First, a liquidator is appointed, either by the shareholders or the court.The process of liquidation also arises when customs, an authority or agency in a country responsible for collecting and safeguarding customs duties, determines the final computation or ascertainment of the duties or drawback accruing on an entry.Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation) or voluntary (sometimes referred to as a shareholders' liquidation, although some voluntary liquidations are controlled by the creditors, see below).This article examines the increased use of bankruptcy sales as a means to quickly liquidate a debtor's assets.In today's strained economic conditions, many businesses can no longer operate profitably and are unable to obtain financing to cover operating shortfalls.

As businesses continue to falter and fail due to the continuing financial crisis, it is likely that liquidations by Chapter 11 sale motion will continue to gain popularity.

The only viable options are a going-concern sale of all of the company's assets or shutdown followed by liquidation.

Chapter 11 creates a unique opportunity for buyers and sellers of business assets.

The sale of capital assets results in capital gain or loss.

The sale of real property or depreciable property used in the business and held longer than 1 year results in gain or loss from a section 1231 transaction.

As businesses continue to falter and fail due to the continuing financial crisis, it is likely that liquidations by Chapter 11 sale motion will continue to gain popularity.The only viable options are a going-concern sale of all of the company's assets or shutdown followed by liquidation.Chapter 11 creates a unique opportunity for buyers and sellers of business assets.The sale of capital assets results in capital gain or loss.The sale of real property or depreciable property used in the business and held longer than 1 year results in gain or loss from a section 1231 transaction.It can take account of personal relationships of mutual trust and confidence in small parties, particularly, for example, where there is a breach of an understanding that all of the members may participate in the business, Upon hearing the application, the court may either dismiss the petition, or make the order for winding-up.