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

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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

Some of Sears’ biggest lenders are pushing for the troubled retailer to liquidate rather than try to reorganize through the bankruptcy process, The Wall Street Journal reported on Thursday. Esther Fung, WSJ, "Sears Exit Would Leave Big Holes in Malls. Some Landlords Welcome That.," 12 Oct. 2018 Hovland in July also ordered that cash and jewelry seized from Willocks be liquidated and the proceeds doled out to victims. Fox News, "Last defendant in Jamaican lottery scam case going to trial," 9 Sep. 2018 Days after shutting down 137 campuses and leaving 35,000 students and 8,000 employees in the lurch, the company filed for bankruptcy protection to liquidate its business. Danielle Douglas-gabriel, latimes.com, "Defunct for-profit college firm ITT's former executives settle fraud charges," 10 July 2018 Days after shutting down 137 campuses and leaving 35,000 students and 8,000 employees in the lurch, the company filed for bankruptcy protection to liquidate its business. Danielle Douglas-gabriel, latimes.com, "Defunct for-profit college firm ITT's former executives settle fraud charges," 10 July 2018 Days after shutting down 137 campuses and leaving 35,000 students and 8,000 employees in the lurch, the company filed for bankruptcy protection to liquidate its business. Danielle Douglas-gabriel, Washington Post, "ITT’s top executives settle fraud charges with SEC," 9 July 2018 Days after shutting down 137 campuses and leaving 35,000 students and 8,000 employees in the lurch, the company filed for bankruptcy protection to liquidate its business. Danielle Douglas-gabriel, chicagotribune.com, "ITT's top executives settle fraud charges with SEC," 9 July 2018 Otherwise, liquidators have made offers to acquire the stores and liquidate most, if not all, The Wall Street Journal has reported. Lillian Rizzo, WSJ, "Eddie Lampert Wants to Save Sears but Mall Owners Say Don’t Bother," 8 Jan. 2019 Suppliers won’t get hit as hard as when Toys R Us filed Chapter 11 bankruptcy and then liquidated a few months later, experts say. Anne D'innocenzio, The Seattle Times, "Sears’ bankruptcy will have ripple effect, not all of it bad," 16 Oct. 2018

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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Statistics for liquidate

Last Updated

29 Apr 2019

Look-up Popularity

Time Traveler for liquidate

The first known use of liquidate was circa 1575

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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

liquidate

verb

English Language Learners Definition of liquidate

: to sell (a business, property, etc.) especially to pay off debt
: to pay all the money owed for (a debt)
informal : to destroy (something) or kill (someone)

liquidate

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

Legal Definition of liquidate

transitive verb

1 : to determine by agreement or litigation the precise amount of also : to settle (a debt) by payment or other adjustment
2a : to determine the liabilities and apportion the assets of especially in bankruptcy or dissolution liquidate a corporation — compare bankruptcy
b : to convert (as assets) into cash liquidate an estate

intransitive verb

: to liquidate something (as a corporation)

Other Words from liquidate

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

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