I do find it troubling, however, that it’s more often than not used to clear down the ledger of a going concern, and then continue business as usual, same everything, just a new incorporation. You can bet your bottom dollar that they’ll be buying their own assets back on cents on the dollar, reincorporating, putting everyone back in the same positions, and paying some nice fat bonuses out of the capital they’ll be given as part of their dynamic chapter 11 restructure.
I’ve been a creditor on receiverships like this and it’s painful - in my view, if you run a business into the ground, you, your agents, and entities controlled by you or in which you have a substantial interest should be disbarred from operating an enterprise for at least five years. You definitely shouldn’t be permitted to continue in the same enterprise.
Bankruptcy isn’t supposed to be punitive. A company clearing up the books and then being able to generate a profit again in the future is better for creditors than destroying the company completely.
While true, it does enable some strategies in which you purposely run your company with a deficit while paying yourself a good salary until bankruptcy, with no lasting consequences.
And as the previous poster said: you can even "turn the company around" after and pay yourself a massive bonus for making it profitable again.
> You can bet your bottom dollar that they’ll be buying their own assets back on cents on the dollar, reincorporating, putting everyone back in the same positions, and paying some nice fat bonuses out of the capital they’ll be given as part of their dynamic chapter 11 restructure.
What exactly are you looking for a citation for? The GP was stating their strong belief regarding a future event and (I assume) facetiously saying you should bet on it.
The GP makes the claim in such a way that implies most if not all chapter 11 bankruptcies end this way. I was facetiously asking for some evidence from other bankruptcies to support this claim.
