Karl Mathers set up a new company and obtained loans to buy inventory with the intention of filing for bankruptcy after 2 years and selling the inventory later to a close friend at deep discounts.What is the term for this type of bankruptcy fraud?

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This is a bust-out fraud, where the individual sets up a new company, obtains loans, and then intentionally files for bankruptcy after a short period of time to escape debt and sell inventory at deep discounts to a close friend. This is a type of fraud that allows the individual to exploit the bankruptcy process for personal gain.

Karl Mathers Set Up a New Company and Obtained Loans