A subsidiary is just an asset like any other. When liquidating company, it's assets are split between creditors to pay back the debt. Granted, it's very weird

A subsidiary is just an asset like any other. When liquidating company, it's assets are split between creditors to pay back the debt. Granted, it's very weird to have the parent die. Normally you have subsidiaries to isolate risk, and even if the problem is the parent I imagine you'd cool the books to shift the debt to a sarificial limited liability subsidiary that can go bankrupt so the business can continue.