What is forced liquidation?

Forced liquidation is the sale of all investments within a customer's margin account by a brokerage firm, usually after the account has failed to meet margin requirements and margin calls. How Does Forced Liquidation Work?

What is forced liquidation value (FLV)?

The Forced Liquidation Value (FLV) or Forced Sale Value (FSV) is the proceeds received from the sale of these distressed assets, which are used to pay off the debt. The opposite of forced selling in a margin account is a forced buy-in.

What is liquidation & dissolution?

Liquidation or dissolution is the method of dissolving a firm’s identity by selling its assets to settle liabilities. Shareholders and owners take home what is left of it. Dissolution is mainly classified into forced and voluntary. In a forced dissolution, the court orders the shutdown via the sale of the firm’s assets.

What happens when a company is liquidated?

The liquidation of a company is when the company's assets are sold and the company ceases operations and is deregistered. The assets are sold to pay back various claimants, such as creditors and shareholders. The liquidation process happens when a company is insolvent; it can no longer meet its financial obligations.