Where does a company’s wealth go if they go bankrupt?
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The assets, which is probably the only thing the company has that has any kind of value, are usually sold at auction. There are two ways this can go, you can firesale all the assets, so real estate holdings, equipment, even patents can go up to sale to the highest bidders. For a company like Kodak, a financially solvent company will typically buy the bankrupt one, rob it for anything of value (Kodak had a very enviable patent list) and then sell all the assets they couldn’t squeeze a dime out of at auction.
This is risky for the acquirer; most bankruptcies aren’t a SEARS or Kodak, where they have some redeeming quality that makes them interesting. Mostly you end up with something like the old Packard plant in Detroit, a huge relic no one wants to touch because no matter what it will cost you a fortune.
That is why there are so many boarded up businesses during economic downturns, no one wants the liability. I lived near and old phone factory (no kidding, the old Avaya digital handsets that used to be built right here in the USA) that shut down and that facility stood vacant for ~15 years until the city figured they had enough in the coffers to buy off what wasn’t parted out to a company and redeveloped it as a mixed use area.
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