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Simple English definitions for legal terms

liquidation dividend

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A quick definition of liquidation dividend:

A liquidation dividend is a payment made to shareholders when a company decides to stop doing business. This payment usually comes from the company's capital and is divided among the shareholders. A dividend is a portion of a company's earnings or profits that is distributed to its shareholders, usually in the form of cash or additional shares. There are different types of dividends, such as cash dividends, stock dividends, and property dividends. A cumulative dividend grows from year to year when not paid, while a noncumulative dividend does not accrue for the benefit of a preferred shareholder if there is a passed dividend in a particular year or period.

A more thorough explanation:

A liquidation dividend is a payment made to shareholders of a company when it decides to suspend all or part of its business operations and distribute its capital. This payment is usually made in cash and is proportional to the number of shares held by each shareholder.

For example, if a company decides to close down and has $1 million in capital, it may decide to distribute $500,000 to its shareholders as a liquidation dividend. If a shareholder owns 10% of the company's shares, they would receive $50,000 as their share of the dividend.

Liquidation dividends are different from regular dividends, which are payments made to shareholders from a company's profits. Regular dividends are usually paid out on a regular basis, such as quarterly or annually, while liquidation dividends are only paid out when a company is closing down.

liquidation bankruptcy | liquidation preference

General

General chat about the legal profession.

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BulbasaurNoLikeCardio

11:54

About the same size as my wife, she shops Ross, DDs and TJMaxx for her clothes, not sure if they exist in Alaska though

windyMagician

11:54

we call it the lower 48 and as soon as im done with law school im going straight back home

triplethread

11:56

windy dont you get a stipend for living there

windyMagician

11:56

yeah but it’s small. it was 1.7k this year

triplethread

11:57

thats a decent amount of money to be paid to just exist imo

triplethread

11:57

thats three months rent

windyMagician

11:57

it’s not even 2 months rent for me. col here is astronomical esp in the villages

[] starfishies

11:58

thats like a month in a major city lol

triplethread

11:58

i live with two roomies so its cheaper

windyMagician

11:58

gas is like 3.84 rn which makes no sense bc we make it

[] texaslawhopefully

11:58

Wait windy you get a stipend just for living in Alaska

KnowledgeableRitzyWasp

11:58

have you ever seen a wendigo

KnowledgeableRitzyWasp

11:58

how do you deal with the wendigo infestation

windyMagician

11:59

@texaslawhopefully: yep! it’s called the permanent fund dividend

[] texaslawhopefully

12:00

Oh wow that’s very interesting. I’m guessing it’s fundable because so few people live there

windyMagician

12:01

no, it’s a sovereign wealth fund from the incredible amount of oil royalties Alaska has collected over the years

[] texaslawhopefully

12:02

Right, that makes sense, but I assume if more people lived there it wouldn’t be sustainable for dividend payments to go out?

windyMagician

12:02

Alaska’s population used to be bigger and the dividend payment was also bigger. it all depends on the returns of the fund in a given year. It’s enshrined in the state constitution so it would be incredibly difficult to get rid of it even if it was $1

windyMagician

12:03

also, postsecondary education is a qualifying absence so i can still get my dividend even while in law school

[] texaslawhopefully

12:04

Ahh I see. And so it applies to any resident even ones who are out of state at the moment?

windyMagician

12:05

you must maintain ties to the state, come back for at least 72 hours a year, have intent to return to Alaska, and not establish residency in any other state

windyMagician

12:05

and be on a qualifying absence. military and education is okay, being out of the state working is not

babycat

12:05

so if you went to a state school you wouldn’t establish residency there to be in state?

BulbasaurNoLikeCardio

12:06

@KnowledgeableRitzyWasp: if FO taught me anything you mag dump

babycat

12:06

I was wondering about that too bc I would prefer to maintain my current residency

windyMagician

12:08

@babycat: correct. accepting in state tuition in another state is actually a really common and controversial reason that ppl get denied dividends

BulbasaurNoLikeCardio

12:08

Being military I moved ALOT and would establish residency in the states that had no income tax or other tax benefits. I would imagine switching to instate tuition would save significant money

info-man

12:08

i maintained my FL residency but the only advantage is that i get reduced price theme park tickets

[] texaslawhopefully

12:08

I think it depends. For a lot of the top schools, the diff between in state and out of state tuition is just a few grand

babycat

12:11

I have a non-financial interest in maintaining residency but might consider it if it’s a significant amount of money

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