When a company goes into insolvency they quite often have numerous small creditors who have no chance of ever getting their money back and it is those small creditors that I feel sorry for. In these difficult times it is hard enough for them to trade anyway without having companies going bust on them.
Unfortunately, I have seen a number of companies going bust and in some of them there seems to be a certain trend for example:-
Mr A N Other buys a property
A limited company is formed of which Mr ANO is the main director along with at least one other
The ltd company starts trading from that property
A written agreement is drawn out whereby the company ( that's Mr ANO ) pays a fixed amount of money to Mr A N Other for the rent or lease of the property
The company trades successfully but then for whatever reason gets into financial difficulty and gets wound up
A list of creditors is drawn up by the Administrator and that will include Mr A N Other who will become a creditor to his own company
Non preferential creditors usually end up with nothing or very little as the company has no assets, the property of course is still owned by Mr ANO and it's all perfectly legal