A dissolution distribution is a corporate action in which an issuer that is being wound up pays out what remains to its investors. It arises when a company, investment fund, trust or special purpose vehicle is dissolved. Assets are sold, creditors are paid first, and any surplus goes to holders according to their ranking, with preferred shareholders ahead of ordinary shareholders. The event is closely related to a liquidation distribution, and the two terms are often used interchangeably.
Payment may come as one final amount or as several interim distributions while assets are realised. Custodians process it as a mandatory corporate action, removing the security from accounts after the final payment. For tax purposes the receipt is generally treated as a return of capital or a disposal, not as a dividend. In sukuk documents, the dissolution distribution amount is the sum payable to holders when the certificates are redeemed.