Negative Asset Value Law and Legal Definition
Negative asset value occurs in an entity when the liabilities exceed the assets. If the value of the assets declined, the common stock of the company would then be considered to be 'under water' as assets would not be equal to the outstanding senior securities, and in such a case, the common stock would be said to have a negative asset value. [Tri-Continental Corp. v. Battye, 31 Del. Ch. 101, 105 (Del. Ch. 1949)].
