This section is from the book "Business Finance", by William Henry Lough. Also available from Amazon: Business Finance, A Practical Study of Financial Management in Private Business Concerns.
The dissolution of an insolvent corporation and the distribution of the assets is an uncommon proceeding. It requires the consent both of creditors who must trust to the good faith of the officers of the corporation in carrying through the dissolution and distribution of the proceeds, and also of the shareholders who must be convinced that no other procedure is possible.
It is the feeling among creditors and shareholders alike, that those who have managed a corporation which has become insolvent, should not be left free to make their own arrangements for winding up the company, but should be checked and supervised by some responsible officer who will unearth the facts. It is because of this feeling that the remedies of voluntary readjustment and of dissolution are so seldom used, and that the remedies of bankruptcy and receivership are almost always necessary.