A "Liquidation Preference" is a clause in investment and shareholders’ agreements that determines the order in which proceeds from a liquidity event (such as a trade sale or asset sale) are distributed among different shareholders. This clause often pertains primarily to preferred shareholders, such as venture capital investors.

On 26 June 2019, the Directive on restructuring and insolvency^[1] of the European Parliament and of the Council was published in the Official Journal of the European Union.