What are the disadvantages of liquidation strategy to the organization and the society?

Liquidation is a corporate level strategy that is one of four retrenchment strategies implemented when a company is experiencing difficulties in operations after growth has faltered and because the available stability strategies, such as "pause and then proceed," have failed due to a hostile, changing or unclear economic situation.Disadvantages may not always be considered because of the last-chance nature of liquidation retrenchment, although a significant advantage, i.e., self-directed options versus court order mandates, is often the driving force behind the choice to liquidate. Harvard Business School research, reported in 2013 and conducted by Harvard professor Ananth Raman and doctoral student Nathan Craig, indicates some surprising disadvantages besides the commonly discussed ones:Disadvantages:1. Principals of the company (also called directors) may be held liable for misconduct if mandated liquidation investigations show misconduct on their parts.2. Principals may be held liable for all the company's debts.3. All the company's assets will be sold to pay for liquidators' fee and to cover a portion of all debts outstanding. This precludes the possibility of using the assets should the principals want to reopen in the same business.4. All personnel, staff and production teams will be made redundant. Most often, this results in the scattering of human resources so expertise is lost should--as in the above item--the principals want to reopen in the same business.Disadvantages: Raman and Craig Research The disadvantages to liquidation recognized by Raman and Craig indicate that approaching liquidation from the accepted emotional (right-brain) approach, the 100 percent liquidation approach and the math-free approach leads to less than optimum profitability from liquidation. They show that logical strategy (left-brain), changes in markdown discounts at the beginning and end of liquidation and implementation of mathematical algorithms to make decisions and predictions about moving inventory between stores and customer behavior throughout the liquidation process off-set these disadvantages with increased profitability (hence increased debt payment) after liquidation.
Disadvantages to Society:The most often felt disadvantages to society are illustrated by the 2012 liquidation of Borders book stores. A significant social resource for readers and gift givers was removed along with a social gathering place for community groups. A sense of loss was generated in many levels of society by Borders liquidation. A more dramatic social disadvantage was the loss of jobs, financial security and personal pride for the employees of Borders who had to reassess their skills and work histories to find a new fit with employment in a different industry.
Another disadvantage to society is illustrated by the 2008 liquidation of Linens 'n Things, which--along with the above social disadvantages--resulted in a significant loss of selection (some items not being picked up by other retailers) and price-point merchandising, since the Linen 'n Things price-point was accessible to working class families.
"Strategy Formulation," Rex C. Mitchell, Ph.D., California State University, Northridge (DOC)
https://hbswk.hbs.edu/item/everything-must-go-a-strategy-for-store-liquidation