Here are two examples of reluctance-to-liquidate problems:

Entrenched managers may not want to sell off the remaining assets, because they would rather run down the firm and keep their jobs. This can hurt shareholders.

Shareholders may not want to liquidate and sell the firm if it is “underwater,” even if the offer is more than the firm is worth. The reason is that the benefits would go primarily to the creditors. The shareholders may prefer to gamble with the creditors’ money on high-risk ventures instead. Note that this problem now helps shareholders, whereas in the previous case it hurt them.
Thus, this reluctance-to-liquidate issue is never good for creditors, but it can either hurt or help shareholders depending on the situation.