What Is a Liquidation Auction?

The liquidation price is the price at which auctions are restricted in abnormal markets.

Liquidation price

Due to different reasons for liquidation of assets, different time periods for liquidation, and different conditions for the realization of assets, the liquidation price has been increased.

Liquidation prices usually apply to corporate bankruptcy,

(1) Form of bankruptcy

1. Loss of right to dispose of assets. At this time, the party selling the asset has no possibility of bargaining, that is, the selling price is determined by the buyer's bid.

2. No loss of asset disposal rights. At this point, there is still room for bargaining by the party selling the asset, that is, the selling price is determined by negotiation between the two parties.

(B) the way in which creditors dispose of assets

It is executed according to the contract stipulations at the time of mortgage, such as public auction or recovery.

(3) Cleaning up costs

In assessing asset prices such as bankruptcy, full consideration should be given to liquidation costs and other costs.

(IV) Auction time limit

Generally speaking, the long-term selling price is higher, and the short-term selling price is lower, which is determined by the effect of the principle of rapid realization.

(5) Fair market price

Refers to the price at which the transaction price of the asset is satisfactory.

(6) Reference price

The price at which the same or similar assets are sold in the market.