What a ridiculous proposal. Eliminating corporate bankruptcy and making employees personally liable for business debts would wreck the US economy. If debtors take a haircut then it's their own fault for lending in the first place; no one is forced to buy corporate bonds and vendors always have the option of requiring cash on delivery.

Counter-argument, moneylenders shouldn't loan money to companies doing this. And secured lenders have their protections.

Anyways, they knew the game. Bankruptcy auctions are essentially debtors recouping as many of their costs as possible before writing off the rest (further minimizing future taxes).