Define liquidating


The process for liquidating assets varies based on the type of asset and the situation.

Businesses that want to raise cash for spending can attempt to sell their assets to other businesses.

For example: a trust into which a decedent’s business is placed to safeguard the business until it can be sold off.

They are the opposite of debts, which signify money that is owed.

When debts start to outweigh assets or become more than a business or individual can afford to repay, it may be necessary to liquidate assets in order to remain financially stable.

This may involve a public auction, published sale listing or sale on an open financial market.

A return of capital received because of a partial or complete liquidation (going out of business) of a corporation.

Damages can be liquidated in a contract only if (1) the injury is either "uncertain" or "difficult to quantify"; (2) the amount is reasonable and considers the actual or anticipated harm caused by the contract breach, the difficulty of proving the loss, and the difficulty of finding another, adequate remedy; and (3) the damages are structured to function as damages, not as a penalty. A penalty is a sum that is disproportionate to the actual harm.

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