Were they legitimately in financial straights? or was it the thing where they want to force regulators to allow the deal by blowing up their own company?
For example, Albertsons is blatantly doing this so Kroger can acquire them.
I don’t have a real strong view on this specific situation one way or the other but it’s relevant that the appeals courts pretty quickly threw out this suit and allowed Albertsons to pay the dividend.
What a ridiculous proposal. Eliminating corporate bankruptcy and making employees personally liable for business debts would wreck the US economy. If debtors take a haircut then it's their own fault for lending in the first place; no one is forced to buy corporate bonds and vendors always have the option of requiring cash on delivery.
Counter-argument, moneylenders shouldn't loan money to companies doing this. And secured lenders have their protections.
Anyways, they knew the game. Bankruptcy auctions are essentially debtors recouping as many of their costs as possible before writing off the rest (further minimizing future taxes).
For example, Albertsons is blatantly doing this so Kroger can acquire them.