Reading about Rite Aid filing for bankruptcy. They have 3.3 in debt. By claiming bankruptcy they just wash their hands of it? Who eats all the debt?
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There are two kinds of bankruptcy in the US for businesses: restructuring and liquidation. Liquidation-type bankruptcy is the classic type of bankruptcy in which the company hands over all of their assets to a bankruptcy court-appointed trustee who then liquidates all of the assets to repay as much of the debt as possible. After that, the company is shut down. The restructuring form of bankruptcy simply pauses debt payments to allow the indebted company to negotiate with its creditors to restructure their debt payments. Typically a company will go the restructuring route if the problem is a liquidity issue and the liquidation route if it’s a solvency issue.
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