# Business liquidation: how to liquidate a business in the US

> How business liquidation works in the US: voluntary or forced, liquidation companies and their fees, who is paid first, and the assets auctions miss.

Canonical: https://origindatapartners.com/guides/business-liquidation-data-assets
By: Origin Data Partners
Status: Published
Published: 2026-11-05
Updated: 2026-11-05
Sources checked: 2026-11-05

## Quick answer

Business liquidation means selling a company's assets for cash, paying its creditors in the order the law sets and distributing anything left to the owners. It is voluntary when the owners vote to wind up, assign the assets for the benefit of creditors or file Chapter 7 themselves. It is forced when creditors file an involuntary bankruptcy petition, a court dissolves the company on a creditor's petition or a secured lender sells its collateral after a default. Equipment and inventory are usually sold by auction, consignment or negotiated sale, often through a liquidation company paid a percentage of the proceeds, a buyer's premium or a fee set in a written contract. Secured lenders are paid from their collateral, then the costs of the liquidation, priority claims such as recent wages and certain taxes, other creditors and, last, the owners. Auctions often miss the intangible assets: records and data, code, patents, trademarks, domain names and customer lists. Customer data can be sold only within the privacy promises the company made.

## Key points

- Liquidation can be voluntary or forced, and whoever runs it signs for every asset, the records included.
- Proceeds follow a fixed order: secured lenders, the costs of the liquidation, priority wages and taxes, other creditors, then owners.
- List the intangible assets, such as records, code, IP, domains and customer data, before the auction and before any system is cancelled.

## What does it mean to liquidate a business?

Before you liquidate, check what the company's records are worth. AI developers now pay for the operational records of closing and closed companies, such as tickets, work orders, email and chat archives and code ([public deals](https://origindatapartners.com/guides/ai-data-licensing-deals)). A [free valuation](https://origindatapartners.com/check-fit) takes six questions about the business and no files.

To liquidate is to reduce assets to cash and distribute the cash, especially when a business is being wound up ([Cornell LII](https://www.law.cornell.edu/wex/liquidation)). The [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) calls liquidating assets usually a last resort, after no buyers, mergers or successors appear, and says redistributing the assets to creditors and shareholders still needs a sound plan.

Liquidation is not the same as dissolution. Dissolution ends the entity under state law; liquidation is the selling and paying out that happens during the wind-down. A dissolved Washington corporation, for example, continues to exist only to wind up and liquidate: it collects its assets, pays its liabilities in the order of priority set by law and distributes what remains to its shareholders ([RCW 23B.14.050](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.050)). For the state filings, see [how to dissolve a corporation](https://origindatapartners.com/guides/dissolve-a-corporation) and [how to dissolve an LLC](https://origindatapartners.com/guides/how-to-dissolve-an-llc).

Source: [Cornell LII Wex: liquidation](https://www.law.cornell.edu/wex/liquidation)

## Voluntary vs forced liquidation

Who starts the liquidation decides who sells the assets and who signs for them. The main US routes:

| Route | Who starts it | Who sells the assets |
| --- | --- | --- |
| Wind-down and dissolution (voluntary) | The owners. In Delaware, dissolution needs the votes of a majority of the outstanding stock entitled to vote ([Delaware Code](https://delcode.delaware.gov/title8/c001/sc010/index.html)) | The company itself, while it winds up |
| Assignment for the benefit of creditors (voluntary) | The company, which selects an independent assignee; after that the board has no further role ([Mayer Brown](https://www.mayerbrown.com/en/insights/publications/2023/02/abc-assignments-for-the-benefit-of-creditors)) | The assignee: as a going concern, in bulk or by auction |
| Chapter 7 filed by the company (voluntary) | The company, by filing a bankruptcy petition | An impartial case trustee appointed by the U.S. trustee ([U.S. Courts](https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics)) |
| Involuntary Chapter 7 (forced) | Creditors: generally three or more whose undisputed claims exceed a dollar threshold, or one or more if the company has fewer than 12 such creditors ([11 U.S.C. 303](https://www.law.cornell.edu/uscode/text/11/303)) | A case trustee, if the court orders relief |
| Judicial dissolution (forced) | In Washington, a creditor with an unpaid judgment, or whose claim the company admitted in writing, when the company cannot pay its debts as they fall due ([RCW 23B.14.300](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.300)) | One or more general receivers, if the court appoints them to wind up and liquidate ([RCW 23B.14.320](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.320)) |
| Secured lender enforcement (forced) | A lender, after a default on a secured loan | The lender, which may sell, lease or license the collateral; every aspect of the disposition must be commercially reasonable ([UCC 9-610](https://www.law.cornell.edu/ucc/9/9-610)) |

Source: [11 U.S.C. § 303: involuntary cases (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/303)

## How to liquidate a business: step by step

The [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) lists the practical steps; the legal ones depend on the route above. A typical owner-run liquidation:

- The full sequence, including employees, final pay and state filings, is in the [closing a business checklist](https://origindatapartners.com/guides/closing-a-business-checklist).

| Step | What to do | Source |
| --- | --- | --- |
| 1. Decide and document | Owners or the board vote to wind up; record who may sell assets and sign for the company | [Delaware Code](https://delcode.delaware.gov/title8/c001/sc010/index.html) |
| 2. Talk to advisers first | Talk to your lawyer and accountant before ending the lease, selling equipment or disconnecting utilities, and build a plan to present to creditors | [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) |
| 3. Inventory everything | Prepare an inventory of the assets for sale, including the intangible ones: records, data, code, IP, domains and customer lists | [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) |
| 4. Set a liquidation value | Have a qualified appraiser set the liquidation value, estimate the net proceeds and re-evaluate the decision | [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) |
| 5. Choose how to sell | Negotiated sale, consignment, internet, sealed bid or retail; hire an auctioneer, dealer or other expert to run it | [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) |
| 6. Sell without warranties | Use a non-recourse bill of sale so the buyer accepts the associated risk | [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) |
| 7. Pay creditors in order | Withheld payroll taxes first, then the order the law sets (below) | [IRS](https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp) |
| 8. Distribute and file | Distribute what is left to the owners; file final returns, with Form 4797 for business property sold and Form 966 for a corporation | [IRS](https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business) |

Source: [SBA: Close or sell your business](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business)

## Liquidation value: orderly vs forced

Liquidation value sits below market value because the seller has less time. Bank examiners at the [Office of the Comptroller of the Currency](https://www.occ.gov/publications-and-resources/publications/comptrollers-handbook/files/asset-based-lending/pub-ch-asset-based-lending.pdf) use these definitions:

- The appraisal comes before the decision: the [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) says to use the liquidation value to estimate net sale proceeds and then re-evaluate.
- Lenders lend against it. Retail inventory loans have traditionally been structured at advance rates of 80 percent of net orderly liquidation value, as determined by a qualified appraiser ([OCC](https://www.occ.gov/publications-and-resources/publications/comptrollers-handbook/files/asset-based-lending/pub-ch-asset-based-lending.pdf)).
- An equipment and inventory appraisal may not value records, code or IP at all. List those separately, as described below.

| Value | Definition | Typical sale |
| --- | --- | --- |
| Market value | Generally the most likely price in a competitive, open market, with reasonable market exposure and willing, informed buyers and sellers | A well-marketed sale of the business or an asset |
| Orderly liquidation value | A liquidation that allows a brief marketing period; net orderly liquidation value assumes the assets are sold over a reasonable period, generally six to nine months | A planned wind-down, private sales, consignment |
| Forced liquidation value | Based on an auction sale, without reasonable market exposure and with the seller under duress | An auction on a short timetable |

Source: [OCC Comptroller's Handbook: Asset-Based Lending (definitions of market and liquidation value)](https://www.occ.gov/publications-and-resources/publications/comptrollers-handbook/files/asset-based-lending/pub-ch-asset-based-lending.pdf)

## Liquidation companies: how they sell assets and what they charge

Liquidation companies, auctioneers and dealers sell business assets for an owner, a trustee, an assignee or a lender. Their pricing is set by contract, so compare the written terms rather than a headline rate. The fee models that public rules describe:

- Get it in writing. Florida requires a written agreement with the owner before an auction, stating the terms on which the auctioneer receives the property and remits the proceeds ([Florida](https://flsenate.gov/Laws/Statutes/2026/0468.388)). Texas requires a signed contract and an agreed, itemized inventory before any auction ([Texas](https://www.law.cornell.edu/regulations/texas/16-Tex-Admin-Code-SS-67-70)).
- Ask how the auction will run. A sale by auction is with reserve unless the goods are put up without reserve in explicit terms; with reserve, the auctioneer may withdraw goods until the sale is announced complete ([UCC 2-328](https://www.law.cornell.edu/ucc/2/2-328)). In Florida, an absolute auction cannot withdraw a lot once a bid is accepted ([Florida](https://flsenate.gov/Laws/Statutes/2026/0468.388)).
- Ask when you get paid. In Texas, auction proceeds go into a trust or escrow account within 72 hours, and the seller must be paid within 15 banking days unless a statute or the written contract says otherwise ([Texas](https://www.law.cornell.edu/regulations/texas/16-Tex-Admin-Code-SS-67-70)).
- Ask whether they sell intangible assets. If records, code, domains and IP are not in the contract, plan a separate sale before the systems are switched off.

| Fee model | How it works | What the rules say |
| --- | --- | --- |
| Percentage of proceeds | The seller pays a share of what the sale brings in | In bankruptcy, a trustee may employ an auctioneer with the court's approval, on terms that include a fixed or percentage fee basis ([11 U.S.C. 327](https://www.law.cornell.edu/uscode/text/11/327); [11 U.S.C. 328](https://www.law.cornell.edu/uscode/text/11/328)) |
| Buyer's premium | Bidders pay a surcharge on top of the winning bid | Florida requires any buyer premium to be announced at the start of the auction; Texas requires its amount in all advertising for the auction ([Florida](https://flsenate.gov/Laws/Statutes/2026/0468.388); [Texas](https://www.law.cornell.edu/regulations/texas/16-Tex-Admin-Code-SS-67-70)) |
| Expenses charged to the seller | Sale costs are deducted from the proceeds | Texas auction records must include an itemized list of all expenses charged to the consignor or seller ([Texas](https://www.law.cornell.edu/regulations/texas/16-Tex-Admin-Code-SS-67-70)) |
| Retainer, hourly or fixed fee | A set fee for running the sale | Also among the terms allowed for professionals in a bankruptcy case, along with contingent fees ([11 U.S.C. 328](https://www.law.cornell.edu/uscode/text/11/328)) |

Source: [16 Tex. Admin. Code § 67.70: auctioneer standards of practice (Cornell LII)](https://www.law.cornell.edu/regulations/texas/16-Tex-Admin-Code-SS-67-70)

## Who gets paid first when a business is liquidated?

Proceeds are paid in a fixed order. In Chapter 7, section 726 pays priority claims first, in the order section 507 sets, then general unsecured claims, then late claims, fines and penalties, interest and, last, the debtor ([11 U.S.C. 726](https://www.law.cornell.edu/uscode/text/11/726)). Outside bankruptcy, a dissolving company pays its liabilities in the order of priority set by law and only then distributes what remains to its shareholders ([RCW 23B.14.050](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.050)).

- Withheld payroll taxes follow people. The IRS can assess the Trust Fund Recovery Penalty against anyone responsible for paying withheld taxes who willfully fails to, and using available funds to pay other creditors when the business cannot pay its employment taxes is an indication of willfulness ([IRS](https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp)).
- Money from selling or licensing records follows the same order. The proceeds typically flow to senior creditors and investors, not employees, [MIT Technology Review](https://www.technologyreview.com/2026/10/13/1145755/ai-labs-buying-data-from-dead-startups-to-train-models/) reported. For how a trustee handles data, see [business bankruptcy and your data](https://origindatapartners.com/guides/business-bankruptcy-company-data).

| Order | Who is paid | Rule |
| --- | --- | --- |
| Secured lenders | From the collateral that secures their loans | In Washington, a dissolved company's property stays subject to liens and security interests ([RCW 23B.14.050](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.050)); in an ABC, the secured party must be paid in full or agree to release its lien ([Mayer Brown](https://www.mayerbrown.com/en/insights/publications/2023/02/abc-assignments-for-the-benefit-of-creditors)) |
| Costs of the liquidation | Administrative expenses of the case | [11 U.S.C. 507(a)(2)](https://www.law.cornell.edu/uscode/text/11/507) |
| Employees | Wages, salaries and commissions, including vacation, severance and sick pay, earned within 180 days before the filing or the date the business stopped, up to a cap per person; then contributions to benefit plans | [11 U.S.C. 507(a)(4) and (5)](https://www.law.cornell.edu/uscode/text/11/507) |
| Taxes | Certain unsecured tax claims of government units | [11 U.S.C. 507(a)(8)](https://www.law.cornell.edu/uscode/text/11/507) |
| General unsecured creditors | Suppliers, landlords and other creditors without collateral | [11 U.S.C. 726(a)(2)](https://www.law.cornell.edu/uscode/text/11/726) |
| Fines, penalties and interest | Fines, penalties and punitive damages, then interest on paid claims | [11 U.S.C. 726(a)(4) and (5)](https://www.law.cornell.edu/uscode/text/11/726) |
| Owners | Whatever is left, if anything | [11 U.S.C. 726(a)(6)](https://www.law.cornell.edu/uscode/text/11/726); [RCW 23B.14.050](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.050) |

Source: [11 U.S.C. § 726: distribution of property of the estate (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/726)

## The assets a liquidation auction usually misses

For patents, trademarks, domains and code, see [how to sell a closed company's intellectual property](https://origindatapartners.com/guides/sell-intellectual-property-closed-company).

Auction lots are physical, so the intangible assets are easy to leave behind. Tax law still counts them: Class VI of Form 8594 covers workforce in place, business books and records, operating systems and other information bases, customer-based intangibles, licenses and permits, and franchises, trademarks and trade names ([IRS](https://www.irs.gov/instructions/i8594)). The [SBA](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business) likewise tells sellers to value intangible assets such as brand presence, intellectual property and customer information.

- Records now sell on their own. AI labs are buying data from dead startups to train their models, [MIT Technology Review](https://www.technologyreview.com/2026/10/13/1145755/ai-labs-buying-data-from-dead-startups-to-train-models/) reported in October 2026; one founder winding down a crypto startup netted roughly $25,000 for his code base, and a bankrupt airline's decades of data sold for $10 million.
- A defunct software company sold every Slack message, internal email and Jira ticket as training data for "hundreds of thousands of dollars", [Fast Company](https://www.fastcompany.com/91528808/shuttered-startups-are-selling-old-slack-chats-and-emails-to-ai-companies) reported.
- The [deals tracker](https://origindatapartners.com/guides/ai-data-licensing-deals) lists public prices as reported.

| Asset | Why it gets missed | What to do before the sale |
| --- | --- | --- |
| Operational records and data | Tickets, work orders, email, chat and documents sit in software subscriptions that are cancelled at closing | Export first and describe them at company level; see [exporting records before closing](https://origindatapartners.com/guides/export-company-records-before-closing) |
| Source code | Repositories are deleted with the engineering accounts | Keep the full history; see [selling source code to AI companies](https://origindatapartners.com/guides/sell-source-code-ai-training) |
| Patents and trademarks | Registered to the company but looked after by former staff or outside counsel | Check they are in force; both transfer only by a written instrument ([35 U.S.C. 261](https://www.law.cornell.edu/uscode/text/35/261); [15 U.S.C. 1060](https://www.law.cornell.edu/uscode/text/15/1060)) |
| Domain names | Held in a founder's or employee's registrar account and left to expire | Confirm the registrant; registrars must send expiry reminders about a month and a week before expiry ([ICANN](https://www.icann.org/resources/pages/errp-2013-02-28-en)) |
| Customer lists and data | Limited by the privacy policy | Read the policy before marketing them (next section) |

Source: [IRS: Instructions for Form 8594, asset acquisition statement](https://www.irs.gov/instructions/i8594)

## Can you sell customer lists and data in a liquidation?

Often, but only within the promises the company made. The FTC has a long history of challenging practices that affect the promises a company made in its privacy policy, and says it may be unfair or deceptive to start sharing consumers' data with third parties or using it for AI training while telling consumers only through a surreptitious, retroactive change to the terms or privacy policy ([FTC](https://www.ftc.gov/policy/advocacy-research/tech-at-ftc/2024/02/ai-other-companies-quietly-changing-your-terms-service-could-be-unfair-or-deceptive)).

The FTC has applied that to liquidations. When RadioShack's customer data, including names, addresses, email addresses and purchase histories, was put up for auction in its bankruptcy, the FTC's consumer protection director recommended conditions on the sale ([FTC](https://www.ftc.gov/news-events/news/press-releases/2015/05/ftc-requests-bankruptcy-court-take-steps-protect-radioshack-consumers-personal-information)):

- Sell the customer information bundled with other assets, not as a standalone asset.
- Sell it only to a buyer in substantially the same line of business.
- The buyer agrees to be bound by the privacy policies in place when the data was collected.
- The buyer gives notice and obtains affirmative consent before using the data in a materially different way.
- In 2025, in the 23andMe bankruptcy, the FTC Chairman wrote that any purchaser should expressly agree to be bound by the company's privacy policies and applicable law ([FTC](https://www.ftc.gov/system/files/ftc_gov/pdf/23andme-letter-ferguson.pdf)).
- Bankruptcy adds its own rule: if the privacy policy prohibited transferring personal information to unaffiliated companies, the trustee may sell it only consistently with the policy, or after a consumer privacy ombudsman is appointed and the court approves ([11 U.S.C. 363(b)(1)](https://www.law.cornell.edu/uscode/text/11/363)).
- California excludes from a "sale" a transfer of personal information as an asset in a merger, acquisition, bankruptcy or other transaction in which the buyer takes control of all or part of the business, provided the information is used consistently with the law ([Cal. Civ. Code 1798.140](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1798.140)). A separate license of the data is not that transaction, so de-identify it first: see [how to de-identify company data](https://origindatapartners.com/guides/de-identify-company-data-before-licensing).

Source: [FTC: request that the bankruptcy court protect RadioShack consumers' personal information (May 2015)](https://www.ftc.gov/news-events/news/press-releases/2015/05/ftc-requests-bankruptcy-court-take-steps-protect-radioshack-consumers-personal-information)

## Before you delete company systems, check what the records are worth

Liquidation timetables push owners to cancel software early to save fees, and cancelling a subscription can delete the records in it. Three checks come first.

Checking the value takes minutes: [see what your company's records are worth](https://origindatapartners.com/check-fit) from six questions about the business, before any system is cancelled.

- Retention: keep the records that support each tax return until its period of limitations runs out, keep employment tax records at least 4 years, and check whether insurers or creditors need them longer ([IRS](https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records)).
- Control: once a bankruptcy is filed, the estate becomes the temporary legal owner of the debtor's property ([U.S. Courts](https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics)); in an ABC, the assignee takes the assets. Ask before deleting anything once either starts.
- Value: describe the systems, the years they cover and their rough volume. No export is needed for a valuation.

Source: [IRS: How long should I keep records?](https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records)

## Business liquidation checklist

- Record the decision to liquidate and who may sign for the company.
- Talk to a lawyer and an accountant before ending the lease, selling equipment or disconnecting utilities.
- Pay final wages and withheld payroll taxes first.
- Inventory every asset, including records, code, patents, trademarks, domains and customer data.
- Get a liquidation value from a qualified appraiser, then choose how to sell.
- Sign a written contract with any liquidation company covering fees, any buyer's premium, expenses, reserve terms and the payment date.
- Read the privacy policy before offering customer data.
- Check what the records are worth before cancelling any system.
- Pay creditors in the legal order, then distribute what remains to the owners.
- File final tax returns, Form 4797 for business property sold and, for a corporation, Form 966.
- Dissolve the entity in every state where it is registered, and keep the records the law requires.


## Liquidating a company outside the US?

The rules and the office-holder differ by country. In the UK, see [liquidation and administration](https://origindatapartners.com/guides/liquidation-administration-company-data-uk); in Australia, [voluntary administration and liquidation](https://origindatapartners.com/guides/voluntary-administration-company-data-australia); in India, [closing a private limited company](https://origindatapartners.com/guides/close-a-private-limited-company-india); in Canada, [closing a business](https://origindatapartners.com/guides/close-a-business-canada).


## Next step

Start with one list of every asset, creditor and system. If the company holds years of tickets, work orders, chat or code, describe them before the auction is booked; no export is needed to find out whether they are worth licensing. For the sale itself, see [selling company data after closing](https://origindatapartners.com/guides/sell-company-data-after-closing).

Origin Data Partners is independent and is not affiliated with any AI data buyer. We help owners compare buyers and find the best fit for their records. [See what your data is worth](https://origindatapartners.com/check-fit).


## Questions and answers

### What does it mean to liquidate a business?

It means selling the company's assets for cash, paying its creditors in the order the law sets and distributing anything left to the owners. It usually happens while the company winds up and dissolves, in an assignment for the benefit of creditors or in a Chapter 7 bankruptcy.

### What is the difference between voluntary and forced liquidation?

In a voluntary liquidation the owners decide: they vote to dissolve and wind up, assign the assets for the benefit of creditors or file Chapter 7. A forced liquidation is started by others: creditors filing an involuntary bankruptcy petition, a court dissolving the company on a creditor's petition, or a secured lender selling its collateral after a default.

### How do liquidation companies charge?

By contract. Common models are a percentage of the sale proceeds, a buyer's premium paid by bidders, sale expenses deducted from the proceeds, or a fixed or hourly fee. Florida and Texas require a written agreement before an auction and disclosure of any buyer's premium, and Texas requires the seller to be paid within 15 banking days unless the contract says otherwise.

### Who gets paid first when a business is liquidated?

Secured lenders, from their collateral. Then come the costs of the liquidation, priority claims such as wages earned in the 180 days before the filing or closing (up to a cap per person) and certain taxes, and then general unsecured creditors. Owners receive only what is left. Pay withheld payroll taxes first, because responsible people can be personally liable for them.

### What is liquidation value?

The price an asset is likely to bring when it is sold without reasonable market exposure and the seller is under pressure. Orderly liquidation value allows a brief marketing period, generally six to nine months for net orderly liquidation value, while forced liquidation value assumes an auction. Both sit below market value.

### Can a business sell its customer list when it liquidates?

Usually only within the privacy promises it made when it collected the data. In the RadioShack bankruptcy the FTC recommended selling customer data only with other assets, to a buyer in the same line of business that agrees to honor the original privacy policy. In bankruptcy, a policy that prohibits transfers limits the sale unless a consumer privacy ombudsman is appointed and the court approves.

### How do I liquidate business inventory?

Have a qualified appraiser set a liquidation value, then choose how to sell: a negotiated sale, consignment, an internet sale, a sealed bid, a retail sale, or an auction run by an auctioneer or dealer. Use a non-recourse bill of sale so the buyer accepts the risk, and report sales of business property on Form 4797.

### Are a company's records worth anything in a liquidation?

They can be. AI developers buy operational records such as tickets, email and chat archives and code from closed companies, and a bankrupt airline's data sold for $10 million in 2026. Records are rarely in the auction lots, so list them and check their value before any system is cancelled.

## Sources

- [Cornell LII Wex: liquidation](https://www.law.cornell.edu/wex/liquidation)
- [SBA: Close or sell your business](https://www.sba.gov/business-guide/manage-your-business/close-or-sell-your-business)
- [Washington RCW 23B.14.050: effect of dissolution](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.050)
- [Washington RCW 23B.14.300: grounds for judicial dissolution](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.300)
- [Washington RCW 23B.14.320: general or custodial receivership](https://app.leg.wa.gov/RCW/default.aspx?cite=23B.14.320)
- [Delaware Code, Title 8, sections 271 to 279 (sale of assets, dissolution and winding up)](https://delcode.delaware.gov/title8/c001/sc010/index.html)
- [Mayer Brown: ABC, assignments for the benefit of creditors (Feb 2023)](https://www.mayerbrown.com/en/insights/publications/2023/02/abc-assignments-for-the-benefit-of-creditors)
- [U.S. Courts: Chapter 7 bankruptcy basics](https://www.uscourts.gov/court-programs/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics)
- [11 U.S.C. § 303: involuntary cases (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/303)
- [11 U.S.C. § 327: employment of professional persons (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/327)
- [11 U.S.C. § 328: terms of employment of professional persons (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/328)
- [11 U.S.C. § 363: use, sale or lease of property (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/363)
- [11 U.S.C. § 507: priorities (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/507)
- [11 U.S.C. § 726: distribution of property of the estate (Cornell LII)](https://www.law.cornell.edu/uscode/text/11/726)
- [UCC § 9-610: disposition of collateral after default (Cornell LII)](https://www.law.cornell.edu/ucc/9/9-610)
- [UCC § 2-328: sale by auction (Cornell LII)](https://www.law.cornell.edu/ucc/2/2-328)
- [Florida Statutes section 468.388: conduct of an auction (2026)](https://flsenate.gov/Laws/Statutes/2026/0468.388)
- [16 Tex. Admin. Code § 67.70: auctioneer standards of practice (Cornell LII)](https://www.law.cornell.edu/regulations/texas/16-Tex-Admin-Code-SS-67-70)
- [OCC Comptroller's Handbook: Asset-Based Lending (definitions of market and liquidation value)](https://www.occ.gov/publications-and-resources/publications/comptrollers-handbook/files/asset-based-lending/pub-ch-asset-based-lending.pdf)
- [IRS: Closing a business](https://www.irs.gov/businesses/small-businesses-self-employed/closing-a-business)
- [IRS: How long should I keep records?](https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records)
- [IRS: Employment taxes and the Trust Fund Recovery Penalty](https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp)
- [IRS: Instructions for Form 8594, asset acquisition statement](https://www.irs.gov/instructions/i8594)
- [FTC: AI (and other) companies, quietly changing your terms of service could be unfair or deceptive (Feb 2024)](https://www.ftc.gov/policy/advocacy-research/tech-at-ftc/2024/02/ai-other-companies-quietly-changing-your-terms-service-could-be-unfair-or-deceptive)
- [FTC: request that the bankruptcy court protect RadioShack consumers' personal information (May 2015)](https://www.ftc.gov/news-events/news/press-releases/2015/05/ftc-requests-bankruptcy-court-take-steps-protect-radioshack-consumers-personal-information)
- [FTC: Chairman Ferguson's letter on the 23andMe bankruptcy (Mar 2025)](https://www.ftc.gov/system/files/ftc_gov/pdf/23andme-letter-ferguson.pdf)
- [California Civil Code 1798.140 (definitions, including "sell")](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1798.140)
- [35 U.S.C. § 261: ownership and assignment of patents (Cornell LII)](https://www.law.cornell.edu/uscode/text/35/261)
- [15 U.S.C. § 1060: assignment of trademarks (Cornell LII)](https://www.law.cornell.edu/uscode/text/15/1060)
- [ICANN: Expired Registration Recovery Policy](https://www.icann.org/resources/pages/errp-2013-02-28-en)
- [MIT Technology Review: AI labs buying data from dead startups (Oct 2026)](https://www.technologyreview.com/2026/10/13/1145755/ai-labs-buying-data-from-dead-startups-to-train-models/)
- [Fast Company: shuttered startups are selling old Slack chats and emails to AI companies (Apr 2026)](https://www.fastcompany.com/91528808/shuttered-startups-are-selling-old-slack-chats-and-emails-to-ai-companies)

## Related reading

- [Business bankruptcy: Chapter 7, Chapter 11 and your data](https://origindatapartners.com/guides/business-bankruptcy-company-data)
- [Selling company data in an assignment for the benefit of creditors (ABC)](https://origindatapartners.com/guides/company-data-assignment-for-benefit-of-creditors)
- [How to close a business: a step-by-step US checklist](https://origindatapartners.com/guides/closing-a-business-checklist)
- [Closing a software business: what could have value beyond the code?](https://origindatapartners.com/guides/sell-company-data-after-closing)
- [AI data licensing deals tracker: who paid what, 2023 to 2026](https://origindatapartners.com/guides/ai-data-licensing-deals)