Liquidation of a corporation:

Question

Quizplus · Accepted Answer

In a voluntary liquidation, the board of directors can act as trustees to oversee the process. Court-appointed receivers are typically involved in involuntary liquidations, such as those initiated by creditors. The correct order of payment in a liquidation prioritizes outside creditors and liquidation expenses before any distributions to stockholders, including those with a liquidation preference. Liquidation primarily aims to ensure that creditors' claims are settled before any returns to stockholders, not to protect the board of directors or stockholders at the expense of creditors.

Liquidation of a Corporation