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liquidate

verb
liq·​ui·​date | \ ˈli-kwə-ˌdāt How to pronounce liquidate (audio) \
liquidated; liquidating

Definition of liquidate

transitive verb

1a(1) : to determine by agreement or by litigation the precise amount of (indebtedness, damages, or accounts)
(2) : to determine the liabilities (see liability sense 2) and apportion assets toward discharging the indebtedness of
b : to settle (a debt) by payment or other settlement liquidate a loan
2 archaic : to make clear
3 : to do away with especially by killing was hired to liquidate a certain businessman
4 : to convert (assets) into cash liquidated his securities

intransitive verb

1 : to liquidate debts, damages, or accounts
2 : to determine liabilities (see liability sense 2) and apportion assets toward discharging indebtedness
Other Words from liquidate Synonyms More Example Sentences Learn More about liquidate

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Other Words from liquidate

liquidation \ ˌli-​kwə-​ˈdā-​shən How to pronounce liquidation (audio) \ noun

Examples of liquidate in a Sentence

The owners were ordered to liquidate the company and pay their creditors. The company is liquidating its assets. The owners were ordered to liquidate. The film is about a professional killer who's hired to liquidate a powerful businessman.
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Recent Examples on the Web

 But the American Left takes an intense interest in Israel as well: The Left hates Israel, and many of its leading lights wish to see the Jewish state as such liquidated. — Kevin D. Williamson, National Review, "America’s Other ‘Special Relationship’ Remains Worth Preserving," 18 Aug. 2019 The firm told the board about an 80-year-old Dallas woman who liquidated a nearly $850,000 savings account and moved the money into one set up by Metals.com. — Melissa Repko, Dallas News, "Precious metals company to refund more than $10 million to Texas investors in settlement with state," 1 July 2019 In July, it was revealed that Neumann had liquidated more than $700 million worth of his stake in the company through a mix of sales and loans against stock. — David Z. Morris, Fortune, "Yet Another Wrinkle For WeWork Investors: An Unusual IPO Structure That Would Give a Tax Advantage to Insiders," 8 Aug. 2019 Particularly when a company is liquidating, there's usually not a lot left to distribute, and employees have to take haircuts on the money they are owed. — Anneken Tappe, CNN, "Elizabeth Warren wants to change the bankruptcy code. Here's what that could mean for American workers," 5 Aug. 2019 Once the court proceedings are completed in the next four to six weeks, EBTH will be sold or liquidated. — Alexander Coolidge, Cincinnati.com, "Everything But The House to sell 'all of the assets,' discloses possible mass layoffs and closures," 9 July 2019 The settlement established a receiver who shut down the sham charities and liquidated all available corporate and personal assets, according to Brnovich. — J. Edward Moreno, azcentral, "AG: $2.5M settlement against sham nonprofits to be distributed to actual cancer centers," 21 June 2019 Owlwood is among Woodbridge’s holdings that are being liquidated to pay back investors. — Los Angeles Times, "These are the most expensive homes ever sold in Los Angeles," 19 July 2019 In the early 1970s, a neighbor in Houston told Joe Wolf that the local K-Mart was liquidating its black powder firearms and equipment. — John Goodspeed, ExpressNews.com, "Black powder passion: Modern mountain man breathes life into history," 11 July 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'liquidate.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of liquidate

circa 1575, in the meaning defined at transitive sense 1a(1)

History and Etymology for liquidate

Late Latin liquidatus, past participle of liquidare to melt, from Latin liquidus

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More Definitions for liquidate

liquidate

verb

Financial Definition of liquidate

What It Is

In the financial world, to liquidate something means to sell it for cash. Although this sounds harmless, in the corporate world the term often carries a connotation of failure, because it is most often used in discussions about Chapter 7 -- a section of U.S. bankruptcy law under which companies and individuals liquidate their assets in order to repay their debts.

How It Works

Individuals, partnerships or corporations can liquidate assets. In the case of bankruptcy, when and how a borrower liquidates assets is a big deal. If all the debtor's assets are tax-exempt or subject to liens, there may not be any assets to liquidate and hence no money to distribute to creditors. If there are assets to liquidate, however, the creditors usually file a written claim so they can receive some of the proceeds. The trustee handles the liquidation and determines which creditors are paid first.

Why It Matters

The last step in the effort to repay debt in bankruptcy is usually to liquidate everything. However, the steps preceding liquidation usually involve bankruptcy, which -- at the individual level -- virtually ruins a person's credit for several years, making it very difficult and expensive to borrow money.

For businesses, liquidation usually means closing for good and selling off the assets. In the end, if a company's stock or bonds are deemed worthless by the bankruptcy court, investors might be able to deduct their losses on their tax returns.

Source: Investing Answers

liquidation

noun

Financial Definition of liquidation

What It Is

Liquidation refers to the selling of assets in return for cash.

How It Works

The term liquidation is most often used in discussions about Chapter 7 bankruptcy -- a section of U.S. bankruptcy law under which companies and individuals liquidate their assets in order to repay their debts.

Individuals, partnerships or corporations can liquidate assets. Here's how liquidation works in the case of bankruptcy.

Individuals
To file Chapter 7, the debtor files a petition with the local bankruptcy court. (In some cases, creditors can force a debtor into Chapter 7 by filing the petition themselves.) The debtor must provide the court with financial and tax information, as well as a list of creditors and outstanding debts. In most cases, the court also requires proof that the individual has obtained credit counseling. Filing the Chapter 7 petition automatically stops most collection actions against the debtor, including lawsuits, garnishments, and phone calls.

The U.S. trustee (or the court itself, in some states) then appoints an impartial trustee to handle the case and liquidate the debtor's assets. If all the debtor's assets are exempt or subject to liens, there may not be any assets to liquidate and hence no money to distribute to creditors. If there are assets to liquidate, however, the creditors usually file a written claim so that they can receive some of the proceeds. The trustee handles the liquidation and determines which creditors are paid first.

Ultimately, a judge decides whether to discharge an individual's debt. The judge can deny the discharge if the debtor failed to keep adequate records, failed to explain the loss of any assets, committed a crime, disobeyed court orders, or did not seek credit counseling. Alimony, child support, and student loans generally cannot be discharged in a Chapter 7 case, nor can most judgments against the debtor for criminal acts.

Businesses
The procedure for filing Chapter 7 bankruptcy is very similar for businesses. Public companies must also file a form 8-K with the SEC to notify shareholders of the bankruptcy proceedings.

Most companies do not file Chapter 7 until they've been unsuccessful with a Chapter 11 filing, which lets them attempt to restructure the company and restore the ability to service debt. In Chapter 7, a company ceases operations, and the appointed trustee liquidates the company's assets in order to repay its debts.

Lenders whose debt is backed by collateral are generally repaid first (via the receipt of the collateral), followed by the unsecured lenders and then the shareholders. In many cases, unsecured bondholders receive only pennies on the dollar. Shareholders almost never receive anything.

Why It Matters

Liquidation is usually the last step in the effort to repay debt. However, the steps preceding liquidation usually involve bankruptcy, which -- at the individual level -- virtually ruins a person's credit for several years, making it very difficult and expensive to borrow money in the future.

For businesses, liquidation usually means closing for good and selling off all the assets. In the end, if a company's stock or bonds are deemed worthless by the bankruptcy court, investors might be able to deduct their losses on their tax returns.

Source: Investing Answers

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