Bankruptcy 101

Trump corp Chapter 11 was managed by a creditors committee, usually comprising the 10 largest creditors (the banks more than likely)

they analyze what the company can pay, it is proposed thru a Plan of Arrangement. The US Trustee managing the case then presents it to a Fed Judge for approval based on the votes by creditors to accept or reject the Plan (payout)

It was voted by creditors to accept a 30% Plan, not bad most are BK's are 5 cents.

So now we look at contractor owed $100,000, he gets $30,000. losing 70K.

Not really if that was profit he pays corp tax say of 35% on the $70,000 or $25,000 netting $45,000, this creditor lost $45,000

Not really, he gets a tax deduction on other corp profits for the $70,000 under the IRS BK laws. or another $25K

Bottom line is a 20% loss as rule of thumb.

So he didn't lose $100K

If that loss can't be adsorbed then yes that company is in trouble.

Most (not all) creditors survive to continue.

All within the goals of the Bankruptcy Act.

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By the way in the Plan Trump gave up 50% equity and was on the hook personal loan guarantees of $900,000,000, all his liquid assets at the time so has ass was on the line.

He survived and later sold his equity and went on.