Liquidations

How the money is made

• 1Shareholders approve the wind-down and an estimated distribution range is published.
• 2Assets are sold and debts and contingencies settled.
• 3Liquidating distributions are paid, usually staged over time.
• 4Your return is the sum of those payments minus what you pay today.

What to watch

• The estimated distribution range, and who produced that estimate.
• Open contingencies: litigation, guarantees, indemnities.
• How much is held back in reserve, and for how long.
• Payment calendar: the first distribution is usually the bulk of it.
• The cost of the wind-down process itself, which comes out of the distribution.

Typical risks

• The final distribution lands below the estimated range.
• Contingencies hold money back for years.
• The calendar stretches and sinks the annualised return.