Karl Mathers set up a new company and obtained loans to buy inventory with the intention of filing for bankruptcy after two years and selling the inventory later to a close friend at deep discounts. What is the term for this type of bankruptcy fraud?

Question

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This type of bankruptcy fraud is commonly referred to as a bust-out scheme, where a person sets up a new company, obtains loans, and then intentionally bankrupts the company to sell off the discounted inventory to friends or confederates.

Karl Mathers Set Up a New Company and Obtained Loans