[james_marks]

In the definition of bankruptcy, you don’t have to pay anything, just have your liability (debts) > assets (ability to pay).

So No, it doesn’t matter if she’s paid it or not. Just being asked to pay in a way that is defensible in court, could make you bankrupt.

[dh2022]

This liability would most likely prevent Sarah from getting a new loan (for example to move away from it all). And in theory bankruptcy means not being able to fulfill existing liabilities-which Sarah is most likely not able to.

But practically Meta probably wants Sarah to not publish the book. Sarah may get even more money from another deal with Meta :)