liquidation

There is a particular sound a shop makes when it is closing down for the last time. The shelves are half bare, someone is writing 'everything must go' on cardboard with a marker, and the shop owner is not haggling anymore because the goal is no longer profit, it is just to turn stock into cash before the landlord locks the gate for good.

That is liquidation, except instead of a shop it is a whole company, and instead of a marker sign there is a liquidator, a person appointed to sell every asset the business owns, from the delivery vans to the office chairs to the brand name itself if anyone wants to buy it.

The money raised does not go wherever it pleases. There is a queue, and it is a strict one. Staff owed salary and the tax authority often stand near the front, lenders and bondholders come next, suppliers who are owed money for goods delivered come after that, and shareholders, the actual owners of the company, stand at the very back of the queue hoping there is anything left by the time it reaches them.

Consider a Lagos textile company that borrowed heavily to expand, then lost its biggest customers when cheaper imports flooded the market. Sales could not cover the loan repayments, the company could not restructure its way out, and eventually a court or the shareholders themselves agreed it made no sense to keep fighting. A liquidator was brought in to sell the factory, the machines, the delivery trucks and the inventory sitting in the warehouse.

In the United Kingdom, this is a formal, closely watched process, often handled by firms whose entire job is winding down companies fairly, because creditors have legal rights and everyone wants to be sure no one jumped the queue.

For a Nigerian in the diaspora who has shares in a company that goes this way, the lesson lands hard, shareholders are last in line, which is exactly why owning part of a business always carries more risk than simply lending it money.