"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." - Warren Buffett
Would that were true. There are any number of companies that get close to zero (Theranos) and others that do go out of business (see 2008 - Lehman, Washington Mutual, etc.)
If you didn't sell on mtgox you lost everything.
Tangential to the current discussion but you didn't have to cash out, you just had to transfer the coins to your own wallet. I think that was the only reasonable choice -- IMO it really seemed at the time that storing coins with mtgox was not a trustworthy option.
I bought 4 BTC on Mt.Gox when they were ~$25 each. Naturally, after I bought it crashed to the ~$1 territory. Thought to myself "Figures..." and decided might as well hold. Cut to a year (or two?) later and the prices hit the ~$30 territory. I decide to sell and reap a nice little ~$20 profit. Lucky me, eh?