Question: There are occasions when unprotable rms do not liquidate. Discuss a case when equityholders benet from defaulting loans even though the rm is nancially solvent.

There are occasions when unprotable rms do not liquidate. Discuss a case when equityholders benet from defaulting loans even though the rm is nancially solvent. (You can assume that equityholders can renegotiate the terms of defaulted loans with debtholders.)

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