Insolvent Liquidation

Insolvent liquidation occurs when a company's debts exceed its assets, meaning it cannot pay what it owes. When it becomes financially impossible to continue operations or settle debts, the company is legally closed down through a process called liquidation. During this process, a liquidator is appointed to sell off the company's assets, and the proceeds are used to pay creditors as much as possible. The goal is to fairly distribute available resources and formally wind up the company's affairs. Insolvent liquidation typically happens when a company is unable to meet its financial obligations and is unable to recover viability.