Legal Dictionary of Pakistan

twelve-month liquidation

A liquidation occurring within 12 months from adoption of the liquidation plan to complete liquidation, subject to a tax law prohibiting the company from recognizing any gains or losses on property sold within that time frame. ( Generally, inventory will not be included unless a bulk sale occurs. IRC (26 USCA) § 337. 4. Bankruptcy. The process - under Chapter 7 of the Bankruptcy Code - of collecting a debtor's nonexempt property, converting that property to cash, and distributing the cash to the various creditors. 0 Upon liquidation, the debtor hopes to obtain a discharge, which releases the debtor from any further personal liability for prebankruptcy debts. Cf. REHABILITATION (3).