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So why should it be possible to buy assets and not obligations then? Perhaps this should be illegal: if you want to buy another company, you get stuck with the

So why should it be possible to buy assets and not obligations then? Perhaps this should be illegal: if you want to buy another company, you get stuck with the whole kit n' kaboodle. If the obligations are toxic, then don't buy it. We'd probably need a good regulatory body to investigate M&As though, to make sure some company doesn't split itself in half, with the good parts in one half and the bad parts in another, and then sell off the good part while letting the bad one fold.

pfdietz 3y ago
> So why should it be possible to buy assets and not obligations then? If the sale was at an honest, market price, what would be the problem? The seller is fairly compensated and can use the money received to service any obligation. Bankruptcy has something called "clawback" where sales or payments by debtors within some time window before the declaration can potentially be "clawed back". There are defense against this, included the mentioned time limits. So one approach in splitting up a company is not leaving the debt burdened part too burdened, so it doesn't immediately fail. There have been a bunch of clawback cases filed in the FTX crypto exchange bankruptcy.