Voluntary Liquidation
A liquidation that is supported by a companys shareholders, as opposed to an involuntary liquidation forced by Chapter 7 bankruptcy. A voluntary liquidation can occur in two situations. One is a members voluntary liquidation when the directors of a solvent company decide to liquidate the company (with shareholder approval), and declare that they will be able to fulfill all creditor obligations in 12 months. The other situation is a creditors voluntary liquidation, when the directors approach an insolvency professional for assistance in liquidation since they will not be able to fulfill creditors obligations.
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