[xiaosun]

>As long as operational cash flow is positive, then no amount of leverage or debt distress will halt the continued operations. The business might "fail" in the sense that the entity is legally re-structured and the equity owners, or even junior debt owners, are zeroed. But there's no reason in a country with well-developed bankruptcy law for this to have any impact on the employees, customers or operations of the business.

You're naively assuming the equity owners meekly turnover the operations to the debtholders in bankruptcy when business performance suffers but cash flow is positive.

Equity holders are going to inflict a ton of pain on the employees and customers of the company first. They are going to layoff employees to the bare bones, sell otherwise performant assets, play games with vendors/receivables, and otherwise do anything else they can do to squeeze more runway before giving things up in bankruptcy.