In what scenario is liquidation typically pursued?

Liquidation is generally pursued in scenarios where recovery is not possible, making it the appropriate choice. This situation arises when a company is unable to meet its financial obligations, unable to reverse its declining performance, or faces insurmountable debts. In such cases, the company's assets are sold off to pay creditors, as there is a recognition that continuing operations would not lead to a more favorable outcome.

In contrast, thriving companies or those with high profits would look towards strategies for growth, investment, or restructuring, not liquidation. Similarly, liquidation would not be a focus after a successful restructuring, as this process typically aims to improve the company's financial health and maintain operations, rather than halt them entirely.