Liquidate

To make the amount of an indebtedness or an obligation clear and settled in the form of money.  When a contract declares that upon default a certain amount is to be paid as liquidated damages, that provision will be unenforceable if the amount is really a penalty.  The test will be whether the amount has any reasonable relation to the loss suffered.

To reduce all the assets and liabilities of a business or estate to a precise sum in money is order to discharge all the debts and wind up the business or estate.

Liquidated damages - Damages which are liquidated or agreed upon in advance between the parties should either of them breach of the contract into which they have entered, if not a penalty, the courts will enforce this provision of the agreement.

Liquidation - The act of liquidating, for a corporation to be in liquidation is equivalent to its affairs being wound up.  The purpose of an ordinary bankruptcy proceeding is the liquidation of the estates and the distribution of the bankrupt.

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