# Liquidations in Recovery Mode

**Liquidations in Recovery Mode (TCR < 150%)**

| Scenario                                               | Liquidation Action                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| ICR =< 100%                                            | All collateral and debt (minus the $USC20 liquidation reserve) is redistributed to active shuttles.                                                                                                                                                                                                                                                                                                                                                                            |
| MCR > ICR > 100%; SP >= shuttle debt                   | All debt from the shuttles that were flagged for liquidation is offset by $USC in the Stability Pool. The liquidated shuttles’ collateral is shared between Stability Pool depositors and the liquidator.                                                                                                                                                                                                                                                                      |
| MCR > ICR > 100%; SP < shuttle debt                    | <p>All the Stability Pool’s $USC is offset with an equal amount of debt from the shuttles that were flagged for liquidation. A fraction of the collateral (equal to the ratio of its offset debt to its entire debt) is shared between Stability Pool depositors and the liquidator.<br><br>All remaining collateral and debt that was not liquidated (minus the $USC20 liquidation reserve) is redistributed to active shuttles</p>                                           |
| <p>TCR >= ICR > MCR; SP >= shuttle debt</p><p><br></p> | <p>$USC in the Stability Pool is offset with an equal amount of debt from the shuttles that were flagged for liquidation. </p><p><br>A fraction of collateral with dollar value equal to MCR \* debt is shared between depositors.<br><br>Nothing is redistributed to other active shuttles.<br><br>Since its ICR was > MCR, the shuttle has a collateral remaining, which is sent to the Surplus Pool and is claimable by the liquidated borrower. The shuttle is closed.</p> |
| TCR >= ICR > MCR; SP < shuttle debt                    | Nothing done                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| TCR =< ICR                                             | Nothing done                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

Where:

ICR = Individual Collateral Ratio for CDCETH shuttles

MCR = Minimum Collateral Ratio for CDCETH shuttles

TCR = Total Collateral Ratio for CDCETH shuttles

SP = Stability Pool


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