An asset that is not performing well in the markets may also be partially or fully liquidated to minimize or avoid losses.
An investor who needs cash to fulfill other non-investment obligations, such as bill payments, vacation expenses, car purchase, tuition fees, etc. Financial advisors tasked with allocating assets to a portfolio usually consider, among other factors, why the investor wants to invest a certain amount of money and for how long s/he would like to invest for.
See also final dividend, General Utilities Doctrine.
The cash proceeds would then be used to make a down payment for a home.
When the company filed for bankruptcy protection in September, Brandon promised the court, in his opening declaration, that “Toys R Us is here to stay.”Toy manufacturers and lenders who were owed money by Toys R Us, and landlords who owned store properties, backed nearly every request Toys R Us made as it attempted to reorganize.
Toy makers said they needed the retailer to survive because it provided the best year-round showcase for all of their products, unlike retailers that only stock up on toys in November and December and shrink their toy aisles after the holidays.
While businesses can liquidate assets to free up cash even in the absence of financial hardship, asset liquidation in the business world is mostly done as part of a bankruptcy procedure.
When a company fails to repay its creditors due to financial hardship and prolonged losses in its operations, a bankruptcy court may order a compulsory liquidation of the business assets if the company is found to be insolvent.