Written by: Andy Thompson on 18th April 2024
A liquidation auction, or an insolvency auction, is when company assets are listed for sale at an auction to help indebted companies generate funds to repay creditors. An auction house, auctioneer, or auction company will act on behalf of a liquidator to sell company assets through an auction. An auction house is instrumental to a liquidation as it is a vehicle through which company assets, such as stock and inventory, are advertised for sale to potential buyers and commercial assets are sold.
Auction houses often use the term ‘liquidated stock’ for stock that is advertised for sale on behalf of a company in liquidation. A company in liquidation may choose to release quick cash from company assets through this route to repay creditors and rescue the business, or eventually bring it to a close. Companies in administration may also choose to use an auction house to release value through the sale of company assets.
The benefits of using an auction house to sell liquidation stock or assets
Commercial auction houses facilitate the sale of commercial property and assets on behalf of companies in liquidation through physical and online portals. Auction companies are well placed to sell liquidated stock as they have an already established buyer base with a registered sub-section of buyers interested in liquidation stock.
Online auction portals are purpose-built which makes it a fuss-free experience to arrange asset and property sales. Online auctions are accessible to potential buyers across the country and some portals also offer a host of intuitive features, such as the option to auto bid and custom bid to maximise the likelihood of a sale. Asset auctions are often held online which provides liquidators with complete flexibility as they are not tied to a location, date or time.
Most reputable auctioneers provide an end-to-end service which typically includes:
Auction houses are connected to regional, national, and international networks of buyers interested in assets for sale on behalf of companies in liquidation. This route can be beneficial for liquidators as it casts a wider, albeit targeted net in the search for potential buyers. The interest from online auctions can also be gauged immediately as these are held live which generates results fast.
The auction route is popular for buyers on the search for liquidation stock as this often presents exceptional value for money and supports the cycle of sustainability. As businesses look to close shop and settle company debts, speed of sale is therefore a priority which can often mean competitive prices.
How can an auction house support a company in liquidation?
An auction house often cuts out much of the legwork for the liquidator as they will act on their behalf to sell company assets and manage the complete process. This route can also be cost effective as some auction houses offer their services on a no sale – no fee basis which is useful for companies in debt.
Auctioneers make the process simple for both the liquidator and buyer as online listings can be made accessible to any given party and provide a home for terms and conditions, viewing details and collection information which speeds up the sale process.
The services of an auction house can provide a lifeline to businesses in liquidation as through this route, businesses can dispose of company assets with ease and speed which is vital to raise money for creditors.
About the author - Chelsea Williams is a Debt Adviser at Scotland Liquidators with expert knowledge in all things personal and corporate insolvency in Scotland. She advises individuals and businesses in financial distress and supports them throughout their debt journey, alongside a highly qualified team of licensed insolvency practitioners.
Written by: Andy Thompson on 18th April 2024
