What does Liquidation mean?
Liquidation, as used in the bankruptcy process, is the selling of non-exempt assets of the bankruptcy estate to satisfy the debts of certain unsecured creditors owed by the estate. The selling of these assets is normally done by a panel trustee or an operating manager of a business, depending on the type of bankruptcy filed.
When a trustee liquidates assets, depending on the value of the asset, it may be sold. Otherwise, the asset is not liquidated, and either the filing debtor can buy back the asset at pennies on the dollar or potentially get the asset back at the close of the bankruptcy.
Liquidating the assets of a business is a different matter. Bankruptcy laws can be very complex. If there are questions about who can liquidate the business assets and how much money can be recovered in liquidation, the legal maneuvering can become very costly. In this case it is time to talk to a bankruptcy lawyer.