Where does a company’s wealth go if they go bankrupt?

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Where does a company’s wealth go if they go bankrupt?

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Anonymous 0 Comments

Bankrupt doesn’t mean you have no wealth. It means you don’t have enough cash on hand to pay that month’s loan payments.

When this happens, the lenders can demand that you liquidate some of your wealth into cash and repay using that, with varying success rates.

There’s also Chapter 11 bankruptcy which allows you to keep most of your assets because the lenders would get more money that way than if you liquidated them.

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