(CNN) California's Camp Fire didn't just kill dozens of people and destroy thousands of homes. It also left an insurance company in financial ruins, unable to pay millions of dollars to policyholders.

Merced's assets are about $23 million, but it faced about $64 million in outstanding liabilities just in the city of Paradise , court filings show.

The Camp Fire obliterated most of the Northern California city of Paradise last month.

Judge Brian McCabe's decision allows the California Department of Insurance to take control of Merced. According to court documents, the state's Conservation & Liquidation Office will start liquidating what's left of the company.

Unlike with bankruptcy, where a business or individual can start over, liquidation means there is no hope for a company's recovery.

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