This fraudulent scheme in bankruptcy occurs when a failing company moves its assets to a new business which is thriving after convincing the creditors that they should accept what the new buyer is offering for its debts. After the creditors accept pennies on the dollar for the sold company, they learn that the "new" company was a straw company set up by the principal of the failed business. Identify the fraudulent bankruptcy scheme in discussion.

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Looting occurs when a failing company moves its assets to a new business which is thriving after convincing the creditors that they should accept what the new buyer is offering for its debts. After the creditors accept pennies on the dollar for the sold company, they learn that the "new" company was a straw company set up by the principal of the failed business.

This Fraudulent Scheme in Bankruptcy Occurs When a Failing Company