Liquidation Plan
/ˌlɪkwɪˈdeɪʃən plæn/
Definitions
- (n.) A formal document outlining the steps and procedures for winding up a company's affairs, selling assets, paying debts, and distributing any remaining assets to shareholders or creditors.
The court approved the liquidation plan to ensure an orderly dissolution of the insolvent company.
- (n.) A strategy prepared by a trustee or debtor-in-possession in bankruptcy to convert assets into cash and satisfy creditor claims.
The bankruptcy trustee submitted a liquidation plan to maximize recoveries for unsecured creditors.
Forms
- liquidation plan
- liquidation plans
Related terms
See also
Commentary
Liquidation plans must clearly specify the order of priority for distributing funds and comply with applicable insolvency laws to avoid disputes.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.