Forced Liquidation Value Versus Orderly Liquidation Value

What does this mean to you and the value of your assets?

Forced Liquidation Value (FLV)
Forced Liquidation Value means that the assets will be sold in the shortest possible time (typically 30 to 45 days or less) depending on how strong the market is for a specific asset.

Orderly Liquidation Value (OLV)
Orderly Liquidation Value allows for an extended time frame, which means that the time to sell the assets will increase from "shortest possible time" to an expanded time frame of six to twelve months or longer.

The Most Probable Price
Both definitions are based on a professional opinion of the estimated most probable price expressed in currency that the subject assets could typically realize, as of the effective date of the appraisal, at a properly advertised and conducted sale.  By the very nature of negotiation and the extended marketing period, an OLV generally yields higher prices than an FLV.

Important Considerations
It is important to note that an OLV of assets may not bring a higher price. Some assets when put on the open market will not bring more, even with time because of many factors:
  • Supply and Demand at the Time of Sale
  • Potential Pool of Buyers
  • Current Market Conditions

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