Liability from the creditors. If a company is in default they must declare bankruptcy. Failure to do so leaves its officers subject to personal liability. When

Liability from the creditors. If a company is in default they must declare bankruptcy. Failure to do so leaves its officers subject to personal liability. When you fail to supply your customers with the agreed merchandise because you have no money you are bankrupt. Bankruptcy law doesn't allow you to pick and choose who you will pay/supply in hopes you get a last minute break.