If the subsidiary is performing (not saying it is the case here), it's unclear to me how you could even force its liquidation. Financially, shits fly upward, no

If the subsidiary is performing (not saying it is the case here), it's unclear to me how you could even force its liquidation. Financially, shits fly upward, not downward. Losses will contaminate the parent company not the child companies (unless the sub has a structural dependency on the parent). You may have to sell the sub at a heavy discount, which means less recovery for your debt holders. But you would get sued by the debt holders or any minority interest of the sub if you tried to liquidate a healthy sub.