Stocks holding or liquidating
For example, suppose that a common stockholder owns 0.5% of the firm in question.
To arrive at a determination, the company's liquidator must analyze the company's secured and unsecured loan agreements as well as the definition of the share capital (both preferred and common stock) in the company's articles of association.
However, the stock itself will become worthless, leaving shareholders unable to sell their defunct shares.
Therefore, in the case of corporate bankruptcy, the only recourse is to hope that there is money left over from the firm's liquidated assets to pay the shareholders.
In these cases, there does not need to be an actual liquidation or bankruptcy of a company.
In venture capital contracts, a sale of the company is often deemed to be a liquidation event.