[nostrademons]

Shareholders can absolutely get wiped out though.

For example, in the 2009 chapter 11 bankruptcy of GM [1], the assets of "old GM" (the one publicly traded on the NYSE) were sold to NGMCO ("New GM Corporation"), owned by the creditors of GM. Old GM continued to trade on the pink sheets as GMGMQ, and then was renamed MTLQQ ("Motors Liquidation Company") and then MTLQU ("Motors Liquidation Company General Unsecured Creditors Trust") [2]. New GM went public again in 2010 after emerging from bankruptcy protection, which is why if you look up "GM" on Yahoo Finance its history only goes back to 2010.

You can still trade MTLQU on the pink sheets [3], but its market cap is about $10M and it makes no profit - it's basically just a trust to settle litigation. If you held old GM stock going into bankruptcy in 2009 you were basically wiped out. The new company is owned by the creditors (which is kind of the point of bankrupty).

[1] https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reor...

[2] https://en.wikipedia.org/wiki/Motors_Liquidation_Company

[3] https://www.gurufocus.com/stock/MTLQU/summary