What does liquidating mean

The unneeded departments and divisions are often closed with their assets sold or added to other divisions.

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a legal entity - make it nonexistent through legal means.

In other words, there isnt enough cash from operations to pay investors a return on their investments, so some of the business assets are sold in order to give money to the investors.

When a huge retailer has to close all of its stores, it liquidates everything, meaning the inventory and even the shelves and display cases are sold to bargain-hunters, to raise money for the company to pay its debts.

Liquidations are far more common in bankruptcies and situations where the business is closing because it cant support itself with revenues than any other instance.

In a bankruptcy, the court generally takes control of the assets in order to sell them at auction to pay off the outstanding liabilities.


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