| 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.) |