Definition
Orderly Liquidation Value (OLV) represents the estimated gross amount that could be realized from a sale, given a reasonable period to find buyers, with the seller being compelled to sell on an as-is, where-is basis. Unlike forced sale value, OLV assumes some marketing time—typically 6-12 months—but acknowledges the sale is not discretionary.
Significance in Alternative Asset Valuation
Orderly liquidation scenarios are common in estate settlements, business wind-downs, and structured portfolio dispositions. The key distinction from fair market value is the compulsion to sell within a defined timeframe, which typically produces discounts of 15-35% depending on asset liquidity.
For alternative assets, orderly liquidation value calculations must consider:
- Market depth in the specific category
- Seasonal factors affecting sale timing
- Disposition methods available (auction, dealer, private sale)
- Transaction costs including commissions and fees
This standard is particularly relevant for estate planning, where executors need realistic expectations about achievable values when settling estates within legal timeframes.
How Impossival Approaches This
We model orderly liquidation scenarios based on historical disposition patterns and market absorption rates. Our analysis considers optimal sale venues and timing within constrained timeframes, helping executors and advisors plan realistic disposition strategies.
Related Concepts
• Fair Market Value - Value without liquidation constraints • Forced Sale Value - Value under immediate sale pressure • Liquidation Value - General term for disposal-condition values • Market Liquidity - Factor determining liquidation discounts