| The sale of the assets of a bankrupt company to pay creditors. When a companys debts and other liabilities exceed its assets, it is technically insolvent. If the company's directors are unable to shore up its finance by, for example, raising new equity or debt finance, one of its creditors may appoint a receiver to the company. The receivers job is to take over the running of the company, doing whatever he thinks best to help the appointing creditor get its money back. This may result in the company being sold as a going concern, or in the company going into liquidation. When a company goes into liquidation, the receiver will sell its assets as best he can and distribute the cash proceeds in a strict order. Ordinary shareholders of the company come very low down the pecking order, behind trade and bank creditors, but they may eventually recover some or all of their investment. The process of liquidation can last several years.
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