Seller Guide
How to Liquidate a Manufacturing Plant: Step-by-Step Guide
A complete playbook from initial engagement through final settlement. Ten steps, one team, complete accountability.
Engage an Auctioneer or Liquidator Early
The biggest mistake sellers make is waiting too long. Engage a liquidator before your lease ends, before your bank calls the loan, and before the timeline gets compressed. A 10-week process forced into 3 weeks produces significantly lower results. Early engagement gives you options. Later engagement reduces them.
Get a USPAP Appraisal to Understand Asset Values
Before making decisions, understand what your assets are worth. A USPAP-compliant appraisal gives you Orderly Liquidation Value (OLV), a realistic expectation for what a well-marketed auction should produce. This number is essential for lender reporting, bankruptcy proceedings, and your own financial planning.
Notify Employees Per WARN Act Requirements if Applicable
The Worker Adjustment and Retraining Notification (WARN) Act requires 60-day advance notice for plant closings affecting 50+ employees. Failure to comply creates significant legal liability. Consult employment counsel early. Your auctioneer can often work within a WARN Act timeline, but only if they're engaged early enough.
Catalog All Assets with the Auctioneer's Team
KD's team will photograph, describe, and catalog every asset. This typically takes 2–5 days for a mid-size manufacturing facility. Be present during the initial walkthrough to identify all included assets, clarify what's excluded, and answer questions about equipment. Good cataloging drives good results.
Set Auction Date and Execute Marketing Campaign
Once cataloging is complete, the auction date is set and marketing begins. A full-service marketing campaign runs 3–5 weeks: email blasts to 500,000+ contacts, targeted outreach to buyers in your equipment categories, social media, industry press, and auction aggregator listings. More marketing time generally means more bidders and better results.
Hold Inspection Day
Registered buyers visit the facility to inspect equipment in person before bidding. Ensure full access to all equipment, power to run machines, and KD staff onsite to answer questions. A well-attended inspection day is a leading indicator of a strong auction.
Run the Auction
Online timed auctions typically run 2–5 days. KD monitors the auction, handles buyer questions, and manages the platform. You don't need to be involved during the auction itself. We'll give you regular updates and notify you when the auction closes.
Coordinate Buyer Removal
After the auction closes, buyers schedule removal within the defined window (typically 5–10 business days). KD coordinates access, manages the removal schedule, and ensures orderly pickup. We stay onsite or on-call through the entire removal period.
Restore Facility to Required Condition
Once all equipment is removed, you may have facility restoration obligations to your landlord. Coordinate restoration contractors to begin immediately after removal. KD can refer vendors for electrical disconnection, floor cleaning, and general restoration.
Receive Settlement Proceeds
After collecting all buyer payments (typically 7–10 days post-close), KD prepares your settlement statement, a detailed accounting of every lot sold, hammer prices, commissions, and net proceeds. Settlement via ACH or wire typically occurs within 30 days of auction close.
Common Questions
How far in advance should we start the liquidation process?
8–12 weeks before your hard deadline is ideal for a managed auction. This allows 2 weeks for appraisal/engagement, 2–3 weeks for cataloging, 4–5 weeks for marketing, and the auction itself. Starting 4–6 weeks before your deadline is workable but constrains your options. Starting less than 4 weeks before deadline typically requires a compressed or quick liquidation approach.
What if we still have active orders or production running during the process?
This is common, especially in Chapter 11 situations. We regularly work around active operations. The key is to define the auction scope early and coordinate access for cataloging and inspection without disrupting production. Your KD contact will work with you on a sequencing plan.
Who handles environmental issues or hazardous materials?
KD handles equipment and personal property, not environmental remediation. You should engage an environmental consultant separately for any hazardous materials, underground storage tanks, or contamination issues. These must be addressed before or in parallel with the equipment liquidation.
How long after the auction until we receive proceeds?
Typically 30 days after auction close: buyers have 2–3 days to pay, we collect payments over 7–10 days, then settle to you within the remaining window. Courts and lenders sometimes require specific settlement timelines, which we accommodate in the engagement agreement.
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