Commercial Liquidation
When companies file for corporate bankruptcy to escape mounting debts and liabilities, a common method of repayment is called liquidation. This is sometimes referred to as “straight bankruptcy” and usually involves the sale of all products and assets in order to repay all or a portion of the company’s debt.
Liquidation is an option that may be compulsory or voluntary, depending on the specifics of the bankruptcy case. Companies may opt to enter liquidation in hopes of earning enough money to repay their debts, or a judge may order the dissolution of a company and the sale of any assets for lender compensation. For more information on commercial bankruptcy, contact the experienced Boston commercial bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346.
Considerations of Liquidation
Some considerations regarding liquidation often include:
- During involuntary or voluntary liquidation, creditors may be placed in control of the sale of the assets.
- Corporate liquidations often focus on the corporate level and the shareholder level.
- Shareholders may be able to trade stock in exchange for capital gain treatment, usually based on fair market value.
- Liquidations may be in the form of a corporate reorganization.
Companies must make sure to follow all guidelines regarding corporate liquidation, as failure to disclose all assets or failure to follow the instructions of the court may result in fines or other legal action.
Contact Us
If you own a company and are considering commercial bankruptcy, contact the Boston commercial bankruptcy attorneys of Joshua Spirn & Associates at 1-800-975-5346 to discuss your legal options.
