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Business Advice

Voluntary Liquidation – A way to escape Business Bankruptcy
Where all workouts have failed, the firm can try a penultimate option of voluntary liquidation – a liquidation initiated by the firm itself without filing business bankruptcy. A voluntary liquidation, often, is better and more efficient than liquidation initiated by a bankruptcy court. The firm can save the bankruptcy costs and sell the assets at a higher price than a bankruptcy court led liquidation arrangement. All the creditors must agree to this and they may agree in order to receive higher settlement amounts. If this too is not possible, one can go for a pre pack administration outside the court to prevent a legal business bankruptcy.

If none of the above works, a formal business bankruptcy petition may be brought in by either the firm or the creditors, in which an automatic stay or injunction is ordered by the court, preventing creditors from collecting any further money and the court initiates its own actions.