Liquidators are professionals who are tasked with locating and selling all of the assets associated with a company. A liquidator can be appointed a court as part of a company’s dissolution process or hired the company itself as part of a voluntary liquidation. In both cases, the liquidation expert will be involved in the settlement of any outstanding liabilities owed the company, paving the way for the dissolution’s final stages.
The liquidation company will assess the current market value of all assets owned the business once appointed a court system. The liquidator will then take steps to ensure that the best possible sale price for each asset is determined, as well as oversee the sale process. The liquidator may prioritize each liability and pay off each debt as assets are sold, depending on the court’s decision and the laws governing corporate dissolution in that country. The liquidator will consider any court action that may have an impact on the exact amount that must be paid back to each creditor before the business can be legally dissolved when settling the debts.
It’s worth noting that when a liquidator is working under a court order, all proceeds from asset sales go toward paying off all outstanding debts according to the court’s terms. The business owners can only claim the remaining proceeds once the court considers those debts to be settled.
Companies that are voluntarily ceasing operations may also seek the assistance of a liquidator. When the goal is to liquidate a large number of assets, a wholesale liquidator may be the best option. Wholesale liquidators frequently seize complete inventories and sell them to the highest bidder. The liquidator may seek several different buyers, each for specific sub-groups within the larger inventory, depending on the type and scope of the inventory items.
There are also liquidators who specialize in particular types of goods. If this is the case, the liquidator may decide to buy the entire inventory and sell it in a retail store. A furniture liquidator, for example, might buy the inventory of a closing furniture store and resell the items at a profit in his or her own store. A computer liquidator, for example, may buy computers and related equipment from a company that is closing down and resell the items for a profit at a different location.
It is not uncommon for the liquidator to agree on an acquisition price with the business that is closing and then make payments directly to the business’s creditors in voluntary liquidation functions. The business owners do not receive any proceeds from the sale until all outstanding debts are paid, just like in the case of a court-appointed liquidation company.
The functions of a regulator are regulated differently in different countries. As a result, before assuming that a liquidator can perform a specific function with or without the approval of a court of jurisdiction, it’s a good idea to check with the country of origin.