[bombcar]

There are various tricks around this area (the Texas Two-step is a favorite) but most of the blatant ones have clawback possibilities.

https://en.wikipedia.org/wiki/Texas_two-step_bankruptcy

[silisili]

I don't see how this isn't illegal, or more pointedly, why everyone isn't doing it if it is legal? So you can just write off liabilities into a new company? Why wouldn't every company do this every year?

[0x457]

Well, it is illegal to do anything ahead of bankruptcy that would have the effect of preferring shareholders to creditors.

You can't just spin off your debt into a new company and declare bankruptcy as you wish, courts are involved, things must be approved. Clawback exists.