Liquidation

“ Art. XXIV. The Treasury of the Public Debt will reserve, for the purpose of insuring the settlement of the debts of the Liquidation which are still undecided, the bonds of the Privileged Debt, and the bonds of the Unified Debt which form part of the Liquidation funds of which it has the actual custody. All the surplus of the funds of the Liquidation as it is constituted by Art. LXIII of the Law of Liquidation will be at the disposal of our Government for assignment to the charges specified in Articles IX and X of the present law. ”

“ Under the temporary pressure of pecuniary liabilities, contracted with a view to their immediate liquidation, but remaining unliquidated through a combination of circumstances, I have been under the necessity of assuming a garb from which my natural instincts recoil—I allude to spectacles—and possessing myself of a cognomen, to which I can establish no legitimate pretensions. ”

“ Liquidation, you understand, is not the same as failure. When a man fails, he is dishonored; but when he merely liquidates, he remains an honest man.”
“T-t-that’s very d-d-different, if it d-d-doesn’t c-c-cost m-m-more,” said Grandet.
“But a liquidation can be managed without having recourse to the courts at all. For,” said the president, sniffing a pinch of snuff, “don’t you know how failures are declared?” ”

“ Failure to pay taxes due the state is an instance. The liquidation of a corporation may take place because of a consolidation resulting in loss of its original identity. In the case of a merger the merged corporation ceases to exist under the terms of the agreement made which may call for a more or less complete liquidation. Sometimes a reorganization effects the liquidation of an insolvent corporation. If the new corporation obtains the assets of the previous corporation under a forced sale, the money received would be applied to the satisfaction of the old creditors’ claims. ”

“ When the process of liquidation reaches a weak link in the chain of interlocking credits and the bankruptcy of some conspicuous enterprise spreads unreasoning alarm among the business public, then the banks are suddenly forced to meet a double strain—a sharp increase in the demand for loans, and a sharp increase in the demand for repayment of deposits. ”

“ The liquidation plan shall be updated quarterly. After its approval by the CBI, the
liquidation plan shall be available for inspection by the creditors of the bank whose claims
are included on the list of approved claims prepared pursuant to Article 87.
Article 94 Rehabilitation of bankrupt banks
No bankrupt bank shall be rehabilitated in whole or in part except as provided by Article 67. ”

“ Since the work usually does not require the time of all the partners, a customary procedure is to appoint one member—or an outsider—as the liquidator. Notice of the dissolution, in which the name of the liquidator is given, is published in the leading newspapers. If liquidation is necessary because of the death of a partner, great responsibility rests upon the liquidator. He must act in strict good faith and endeavor to realize the best price possible for the assets of the firm in the interest of the deceased partner’s estate. ”

“ As has been pointed out, they are not so compelled but are given the option of a liquidation which on this record appears as favorable to them as that which would result from the sale of the assets and pro rata distribution in solution of all resulting claims for breach of outstanding policies. ”

“ Looking at credit extension and its use for purposes of capital as a whole, the outcome which presents itself most strikingly at a period of liquidation is the redistribution of the ownership of industrial property incident to the liquidation. The funds obtained on credit are in great measure invested competitively in the same aggregate of material items that is already employed in industry apart from the use of loan credit, with the result that the same range of items of wealth are rated at a larger number of money units. ”

“ As soon as the situation became obviously dangerous, a halt would be called and a contraction in loans would follow. But a contraction of loans calls for liquidation, and liquidation produces an exigent demand for currency. ”

“ Congress, in enacting the 1934 Act, recognized that under that of 1932 '* * * a distribution in liquidation of a corporation is treated in the same manner as a sale of stock.' Report of Senate Committee on Finance, No. 558, 73rd Cong., 2nd Sess., p. 37. To prevent avoidance of surtax through liquidation of corporations with large surpluses, Congress found it necessary to place gains on liquidations on a different basis from gains on sales. ”

“ The world of finance is a mysterious world in which, incredible as the fact may appear, evaporation precedes liquidation. ”

“ CHAPTER XXXIX THE STRUGGLE COMMENCED By midsummer of 1896 the liquidation of the affairs of the old firm was practically completed; that is, in so far as related to the conversion of our assets into cash and payment of the proceeds to our creditors. These payments were very large, but there was still a heavy deficiency, which I hoped in time to pay in full with interest, gigantic as the burden seemed.
Every business day found me at my office working early and late as I had never worked before. With but one clerk and an office-boy, a vast amount of detail had to be undertaken by myself. ”

“ Every creditor of the bank, receiving its assets under such circumstances, knows the fact of liquidation, and is chargeable with knowledge of its consequences. He takes the assets received at his own peril. He is dealing with officers of the bank only for the purpose of winding up its affairs. If he accepts something in lieu of an existing obligation looking to future payment, it must be from other parties. ”

“ and after conferences, by his instruction, with the Secretary of the Treasury, I am authorized to assure you, that the government of the United States have no idea of paying their debt in a depreciated medium, and that in the final liquidation of the payments which shall have bean made, due regard will be had to an equitable allowance for the circumstance of depreciation. ”

“ It is sometimes maintained that inasmuch as cash is a realized asset it [Pg 644] has no place in the realization and liquidation statement. Accordingly, under that theory the cash appears only in the trustee’s cash account. There is a good reason, however, for the insistence of some that the realization and liquidation statement should show all the assets taken over by the trustee or receiver and a full accounting for them. ”

“ Liquidation coupled with insolvency is the critical event which is capable of transforming a potential liability into one presently enforceable, as soon as a qualified claimant appears upon the scene. The method of winding up determines who the spokesman for the claim shall be. If a bank is in course of liquidation by the Comptroller of the Currency, the personal liability of stockholders is enforceable upon the direction of the Comptroller, at the suit of a receiver. ”

“ The rest of us have foreseen such rapid liquidation, as a certain result of such a policy, that not only would our town receive a blow from which it could never recover, but the investment world would suffer in the collapse. ”

“ Since Congress intended that investment values should be preserved in each liquidation or divestiture required by the Act, we may assume that it intended the Commission to value securities in a particular liquidation as if that liquidation were not taking place, but not as if the Act had never been passed; for if investment values have been preserved in th early divestitures, it is useless to reconstitute the balance sheet as if the divestitures had not taken place. ”

“ In practice, it is true the liquidation at the time of entry for warehousing is little more than an approximate estimate, and it is mainly for the purpose of determining the amount of the bond to be given. It is made, and the bond is given, before the goods are sent to the warehouse, or even to the appraisers' stores, and before they are weighed, gauged, or measured. ”

“ He suggested that if in fact liquidation had been imminent at the time of respondents' purchases or if it were fairly demonstrable, as a matter of experience, that a director free from all potential self-interest would be more likely to initiate liquidation proceedings or to effect a debt settlement than one not wholly disinterested, a court of equity should explore such issues and not dismiss them out of hand. ”

“ But what we have now to deal with is the liquidation of debts which are becoming due, -in fact, liabilities for which the time of settlement has arrived.
⁠The debts between different countries are, when they approach the time of settlement, embodied, as far as possible, in bills of exchange; they are invariably settled by bills of exchange, so far as the indebtedness of one country to others is covered by the liabilities of those countries to itself. ”

“ Shareholders are given the right to go into liquidation, subjecting themselves, it is true, to the liability of the assessment for the benefit of creditors under § 5151 to an amount equal to the par value of their stock, if needed to make good the indebtedness of the bank, but risking no further investment of new capital in the continued business of the bank. ”

“ Owing to the intelligent and judicious manner in which they handled the delicate problem of conducting a liquidation in listed bonds that should at once be effective and yet not lead to demoralization, they placed themselves among the foremost of those to whom the financial community owes a debt of gratitude. ”

“ Unless the capital stock of the new bank is sold or its assets acquired and its liabilities assumed by another banking institution, in the manner herein prescribed, within two years from the date of its organization, the Corporation shall place the new bank in voluntary liquidation and wind up its affairs. ”

“ Section 115 (c) and §§ 111 and 112, to which it refers, standing alone give no clue to the part which a stockholder's loss on liquidation is to play, in computation of the tax, more than they give in the case of gains and losses upon sales or exchanges of property. ”

“ The Board of Liquidation is a mere agent of the government to enable it to carry into effect a plan of cono lidating all its outstanding debt and converting it, with the consent of its creditors, into a uniform bond, with the same rate of interest, and providing additional security for its payment. ”

“ The banks, indeed, may go into liquidation, but their notes are still current. The maternal bank may be mouldering in the earth; but these its children are moving about, performing the work of circulation. Why? The credit of the nation is behind them; and everybody knows, when he takes one of them, that he is safe. Therefore, I ask, how can the proposed requirement be carried into execution? how can you bring back these runaways, when once in circulation on their perpetual travels?
There is but one way, and that is by the return to specie payments. ”

“ If a liquidator is remarkably unfit for administrating the affairs of liquidation or has acted in contravention of his material duties, any shareholder who holds shares representing no less than 3/100 of the total issued and outstanding shares may apply to the court for removal of such liquidator from office. ”

“ Liquidation of a local bank, like its daily operations, must from necessity and in the interest of good business be carried on, in the main, in the community where the bank did business with its depositors and other customers. ”

“ If a depositor withdraws from the bank, he receives only his deposits and interest. If he continues, his only chance of getting anything more would be in the unlikely event of a solvent liquidation, a possibility that hardly rises to the level of an expectancy. ”

“ Any property which is not disposed of in accordance with the provisions of the preceding two paragraphs shall revert to the National Treasury.
Article 81 (Juristic Person in Liquidation) A juristic person which has been dissolved shall have the rights and duties only within the scope of liquidating purpose.
Article 82 (Liquidator) When a juristic person has been dissolved, the directors shall become the liquidators except in the case of bankruptcy: Provided, That this shall not apply, if otherwise prescribed in the Articles of incorporation, or by the resolution of a general meeting. ”

“ In the case prescribed in the preceding paragraph, if the juridical person under the liquidation procedure has already paid any money to the obligees, or has delivered any asset to the person with vested rights, the trustee in bankruptcy may retrieve such money or asset.
(4) The public notice pursuant to the provision of paragraph 1 above shall be made by publishing it in the Official Gazette. ”

“ Treatment of Good-Will upon Liquidation by Sale.—When dissolution is brought about by the sale of the entire business, it may happen that the amount realized on the assets is smaller than their book value, and the difference must be treated as a loss in accordance with the principles previously stated. Similarly, where the assets are sold and the price realized is larger than their book value, the excess constitutes a profit and must be distributed among the partners in profit and loss ratio. ”

“ When an enterprise as legal person is dissolved or is declared bankrupt, the competent authority or a people's court shall organize the organs and personnel concerned to establish a liquidation organization to liquidate the enterprise. ”

“ If debts are thereby swollen or assets made to shrink, the outcome is an unlooked-for incident of a method of administration conceived to be more efficient than present sale and distribution. The Constitution of the United States does not confer upon the depositors a vested right to liquidation at the hands of a state official. ”