A quick definition of liquidating distribution:

A liquidating distribution is when a company or partnership gives out its assets to its owners because it is closing down. This is different from a nonliquidating distribution, which is when a company gives out extra money or property to its owners while still in business. Other types of distributions include corporate distributions, which are payments made by a corporation to its shareholders, and partnership distributions, which are payments made by a partnership to its partners. Probate distributions are when a court divides up the assets of a deceased person among their heirs. Securities-offering distributions are when a company sells its stocks or bonds to the public, either through a broker or on its own.