3 ms·

No, typically there is nothing to sell. The "assets" are worthless (code, website, customer lists). Maybe furniture they sell to liquidators at 5% of price. The

by jbkiv 6y ago

No, typically there is nothing to sell. The "assets" are worthless (code, website, customer lists). Maybe furniture they sell to liquidators at 5% of price. The liquidators will then put that in storage and will sell the assets at 40-50% of price. Unwinding a company is quite complex and he works with a skeleton accounting staff to close the corporation, pay state, federal, sales taxes (you can never escape that), closing the DE corp and all foreign companies as well. Lot of admin work.

jamestimmins 6y ago
Thanks for sharing! Who pays for this? Also, naive question, what happens if you don't do these things? If the company has no assets, it's not like you can get sued? I'm not arguing that this should be done, I'm just curious what the specific reason is that it happens.
- redis_mlc 6y ago
  The equipment and furniture are either auctioned or liquidated. If there's a corporation or formal payroll involved, then it's important to wind those down carefully for various legal reasons. So either the remaining assets or owners will have to pay for the paperwork wind down. Typically with a small company of 50-60 employees, the office manager and 1-2 accountants wll stay on for a few months to wrap all that up. I was the last eng. employee to leave Novafora/Transmeta, and attended the auction and bought some of the computer equipment. The most expensive hardware items were the almost new espresso machine, the 3 Ghz scope and the bed of nails tester. Intel bought most of the IP for a little more than peanuts.
  - jamestimmins 6y ago
    Fascinating. I had no idea this process was so formalized, but it makes a lot of sense in retrospect.
  - alexbrower 6y ago
    True, there are liquidations of physical assets. But the biggest benefit to the last remaining employees and board members (particularly those who are Directors or Officers) is reduction in liability around the details of shutting down a business. It's not about the thousands of dollars you get for the office furniture. By the point a company does an ABC, payroll obligations are likely the only category of liabilities to impact any employee still involved. A firm like Sherwood will in fact readily offload that stuff to the most reputable firm who can haul it away, whatever is most efficient. It's the forgotten obligation that Sherwood helps protects you from (e.g., rent payment, tons of small bills). When that bill shows up after you have had the hard conversations with stakeholders, that's yet another reminder to your investors that things went south. (Sherwood gets the missed bill and pays it out from a carefully planned escrow and based on a wind-down agreement that your investors signed off on). Much preferable to all of your investors notifying _you_ of an outstanding obligation. Firms like Sherwood play an important role in allowing all of us to move on with life. There are several details here I'm skimming over that someone at Sherwood would correct me on, but hopefully this is helpful. Sherwood=good guys who help startup people move on. Hopefully you have your business well-organized. Sherwood has the process down to a science. [EDIT]: 'who pays for this?' There's typically a negotiation between the remaining creditors with voting rights (your board members at time of wind-down), but the cost of a firm like Sherwood is small compared to the risk of you trying to shut down your startup in your spare time. (Don't do that.)
- vidarh 6y ago
  The directors have legal responsibilities that puts them at risk if the business is not wound up properly. It is possible to just let it go bankrupt and leave to the appointed administrators to deal with it, but then you have someone with interests not aligned with yours going through all your papers looking for ways to extract value. That's a pretty good incentive for directors to try to ensure an orderly wind-down on their terms.
xzel 6y ago
This is a shot in the dark and maybe a little insensitive because people are losing their job (I lost mine recently) so I apologize for that. Does anyone know of any of these liquidators for office furniture? I've been trying to get a Herman Miller desk chair for a reasonable price for about a year now.
- dmckeon 6y ago
  Used these folks in San Mateo a few years ago - YMMV: https://www.abettersource.com/ https://www.abettersource.com/
  - aaronbrethorst 6y ago
    That's really cool; does anyone know of a similar business in Seattle? I could use a height adjustable table at home while I'm stuck working here in our currently-indefinite quarantine.
    - Klonoar 6y ago
      I bought my stuff at Ducky's, over in the Industrial District: https://www.duckys.com https://www.duckys.com
      - aaronbrethorst 6y ago
        thanks!
- TrackerFF 6y ago
  Tbh, I just called directly to the moving companies that handle the physical moving from office to liquidator, and asked who the usual suspects were. Scored some nice adjustable desks for pennies on the dollar.
- taurath 6y ago
  There are about 4 in the Bay Area I know of. Look for office supply warehouse in the suburbs. They also will frequently post to craigslist. Expect 70% of list though. It’s hard to find lower.

by jbkiv 6y ago

jamestimmins 6y ago

Thanks for sharing! Who pays for this? Also, naive question, what happens if you don't do these things? If the company has no assets, it's not like you can get sued? I'm not arguing that this should be done, I'm just curious what the specific reason is that it happens.

redis_mlc 6y ago
The equipment and furniture are either auctioned or liquidated. If there's a corporation or formal payroll involved, then it's important to wind those down carefully for various legal reasons. So either the remaining assets or owners will have to pay for the paperwork wind down. Typically with a small company of 50-60 employees, the office manager and 1-2 accountants wll stay on for a few months to wrap all that up. I was the last eng. employee to leave Novafora/Transmeta, and attended the auction and bought some of the computer equipment. The most expensive hardware items were the almost new espresso machine, the 3 Ghz scope and the bed of nails tester. Intel bought most of the IP for a little more than peanuts.
- jamestimmins 6y ago
  Fascinating. I had no idea this process was so formalized, but it makes a lot of sense in retrospect.
- alexbrower 6y ago
  True, there are liquidations of physical assets. But the biggest benefit to the last remaining employees and board members (particularly those who are Directors or Officers) is reduction in liability around the details of shutting down a business. It's not about the thousands of dollars you get for the office furniture. By the point a company does an ABC, payroll obligations are likely the only category of liabilities to impact any employee still involved. A firm like Sherwood will in fact readily offload that stuff to the most reputable firm who can haul it away, whatever is most efficient. It's the forgotten obligation that Sherwood helps protects you from (e.g., rent payment, tons of small bills). When that bill shows up after you have had the hard conversations with stakeholders, that's yet another reminder to your investors that things went south. (Sherwood gets the missed bill and pays it out from a carefully planned escrow and based on a wind-down agreement that your investors signed off on). Much preferable to all of your investors notifying _you_ of an outstanding obligation. Firms like Sherwood play an important role in allowing all of us to move on with life. There are several details here I'm skimming over that someone at Sherwood would correct me on, but hopefully this is helpful. Sherwood=good guys who help startup people move on. Hopefully you have your business well-organized. Sherwood has the process down to a science. [EDIT]: 'who pays for this?' There's typically a negotiation between the remaining creditors with voting rights (your board members at time of wind-down), but the cost of a firm like Sherwood is small compared to the risk of you trying to shut down your startup in your spare time. (Don't do that.)
vidarh 6y ago
The directors have legal responsibilities that puts them at risk if the business is not wound up properly. It is possible to just let it go bankrupt and leave to the appointed administrators to deal with it, but then you have someone with interests not aligned with yours going through all your papers looking for ways to extract value. That's a pretty good incentive for directors to try to ensure an orderly wind-down on their terms.

xzel 6y ago

This is a shot in the dark and maybe a little insensitive because people are losing their job (I lost mine recently) so I apologize for that. Does anyone know of any of these liquidators for office furniture? I've been trying to get a Herman Miller desk chair for a reasonable price for about a year now.

dmckeon 6y ago
Used these folks in San Mateo a few years ago - YMMV: https://www.abettersource.com/ https://www.abettersource.com/
- aaronbrethorst 6y ago
  That's really cool; does anyone know of a similar business in Seattle? I could use a height adjustable table at home while I'm stuck working here in our currently-indefinite quarantine.
  - Klonoar 6y ago
    I bought my stuff at Ducky's, over in the Industrial District: https://www.duckys.com https://www.duckys.com
    - aaronbrethorst 6y ago
      thanks!
TrackerFF 6y ago
Tbh, I just called directly to the moving companies that handle the physical moving from office to liquidator, and asked who the usual suspects were. Scored some nice adjustable desks for pennies on the dollar.
taurath 6y ago
There are about 4 in the Bay Area I know of. Look for office supply warehouse in the suburbs. They also will frequently post to craigslist. Expect 70% of list though. It’s hard to find lower.