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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In bankruptcy “they” becomes a different group of people. Very roughly, the people who owned Rite Aid before hand the business in its entirety over to the people who loaned Rite Aid the $3.3bn in debt. It’s worth less than $3.3bn. The owners lose everything, and the lenders lose something, and the bankruptcy process is designed to force everyone to work together on the plan, so that all the different people who loaned Rite Aid money don’t step on each other and destroy something valuable in the process.
Edit: helpful to add one more example maybe: think about this in the context of a person owning a house. The bank lent them money to buy it. They go bankrupt (or at least they “default” and can’t pay the mortgage). The bank gets the house, which might be worth less than they lent, but in exchange they can’t come after the person for the rest of the money anymore.
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