Liquidation & Reorganization

Business Debt Liquidation & Reorganization

Helping You Plot The Best Course For Your Business

If you own or operate a business that is struggling to pay its bills or meet expenses, you may have a difficult choice to make in the near future. At some point, you may need to take action to deal with your business's mounting debt. An experienced attorney from Azadegan Law Group, APC can analyze your situation to determine whether you should reorganize your business or fold up and start fresh.

What Is Liquidation?

Liquidation is the full-scale sale of a business's assets to convert the company's value to cash — or liquidity:

  • Real estate
  • Vehicles
  • Intellectual property
  • Securities
  • Equipment
  • Accounts receivable

Businesses usually liquidate in order to wind up their affairs when they intend to dissolve. In the case of solvent businesses, this can occur voluntarily in order to make it easier to resolve outstanding accounts and make distributions to shareholders. In the case of insolvent businesses, it can also occur under court supervision during Chapter 7 bankruptcy.

Whether it occurs in or outside of the context of bankruptcy, total liquidation is usually a prelude to the dissolution of a company. In the case of bankruptcy, a U.S. Trustee takes possession of the company's assets, liquidates them and distributes the proceeds to creditors. Companies that liquidate outside of bankruptcy, however, should take care during liquidation to ensure they receive a reasonable price for property sold to maximize returns for their stakeholders.

What If I Want To Keep My Business Going?

For struggling businesses that want a second chance at success, Chapter 11 bankruptcy allows companies to undergo reorganization in an attempt to restructure their obligations and regain profitability. Reorganization, however, is not a process to be taken lightly. It requires substantial cooperation with your creditors and can be complicated. Moreover, if the disparity between debt and income potential is too high, the chances of a successful reorganization may be slim and your creditors may ultimately force you to liquidate. An experienced business bankruptcy attorney can help you evaluate your company's financial situation to determine if reorganization has a reasonable probability of success.

Making the decision to liquidate your company is never easy. That is why it is important to thoroughly consider whether reorganization could allow your company to continue doing business. However, reorganization is not always wise and may serve little purpose for severely indebted businesses.

Call Us To Discuss Your Options For Dealing With Business


Our bankruptcy attorneys at Azadegan Law Group, APC can analyze your situation and give you the information and advice you need to make these hard decisions with confidence. Call our office today at (310) 340-1550 or contact us online to schedule a no cost consultation with one of our lawyers.