In bankruptcy proceedings, what typically happens to a company's assets?

In bankruptcy proceedings, the primary focus is on addressing the financial obligations of the company to its creditors. When a company files for bankruptcy, its assets are typically liquidated, meaning they are sold off to pay creditors according to the priority established by bankruptcy law. This process ensures that creditors receive compensation for the debts owed to them, adhering to the legal framework that governs bankruptcy.

The proceeds from the sale of the company's assets are distributed in a specific order, often prioritizing secured creditors first, followed by unsecured creditors, and leaving stockholders at the end of the line, often with little to no return. This structured approach emphasizes the primary goal of the bankruptcy process: to settle debts as equitably as possible.