well what about football clubs? I keep hearing of clubs that are tens of millions in debt, how come the debtors have never foreclosed (if that's the right term) on them? we had this debate at work, and ticket/merch sales were brought up, but still - they're obviously not enough to make a difference or the club would be in profit. i'm pretty sure if I spent year after year declaring pro-rata losses like the clubs do i'd have lost my house, car and everything else.
You've got to ask what a creditor has to gain from forcing a club to wind up. If your debt it say 5mil, and you have assets worth 2.5mil then the questions the creditors need to ask themselves is this:
1. Are they currently making repayments?
2. If they're not what is the likelihood that they will start to?
3. What is the risk to me of starting a winding up petition? What will my return on the debt owed be?
4. Are there other routes that will allow me to get more of my money back?
In the above example creditors are looking at a maximum of 50% return on debt depending on the nature of the other creditors.
Nine times out of ten forcing a company into bankruptcy or seeking the sale of assets is as detrimental to the creditors as it is to the club/business, for the very reason that it impacts their ability to make money to repay the debt. Creditors will only use the nuclear option to protect their investment, in cases when it looks like the situation is going to get significantly worse to the point where they might get nothing in the end.
For a lot of football clubs for instance it's shareholders/owner goodwill keeping them afloat, or persistent refinancing, which is pretty much the same thing in a lot of cases.