eli5: what does it mean if someone is “liquidating assets”

Question

and how can it be illegal?

In: Economics

Answer 1

Liquidating assets means selling assets for cash.

An asset is usually some sort of business, property, equipment, or cash equivalents (i.e. something you can sell quickly to turn into cash).

Liquidation by itself is not illegal. Legality comes into play when the person selling does not own the asset outright (e.g. a leased car), or signed contracts that stipulate rules and requirements around an asset sale (e.g. a business with multiple partners or owners), or is under court order to specifically not sell an asset or follow very specific guidelines to sell an asset (i.e. Chapter 11 bankruptcy, 363 sale, Chapter 7 liquidation, meet M&A requirements).