Liquidation
When a firm's business is terminated, assets are sold, proceeds pay creditors and any leftovers are distributed to shareholders. Any transaction that offsets or closes out a long or short position. |
Similar financial terms
Liquidation valueNet amount that could be realized by selling the assets of a firm after paying the debt.
Liquidation rights
The rights of a firm's securityholders in the event the firm liquidates.
Liquidation Preference
Sometimes, usually by virtue of an agreement, certain shareholders will receive preferential treatment if a company is liquidated. Investors may insist on this so that if a company fails, they are paid out first before any other shareholders receive any payouts.
Position liquidation
The closing out of a long position. The term is sometimes used to denote closing out a short position, but this is more often referred to as covering.
