There is no such thing as a "good" bankruptcy," but it is a fact of business. When businesses give credit to each other, whether that be by net-30 or other payment terms, there is a risk of getting stuck with a bad debt. How much potential "bad debt" a business is willing to risk taking is a business decision.

Chapter 11 provides some flexibility to companies that have a chance of recovery, and if they recover there is the potential for long-term debt recovery. Many places in the world don't have a "Chapter 11" equivalent, and the only action is the receiver's tape being placed over the door.

Investors are always taking a chance. "Invest" is the classy term for "gamble," and all gambles are risky. You never invest/gamble any more than you can afford to lose, because the odds are always in the house's favor.

That's why courts handle bankruptcy. If the court sees there really is a potential for salvage of the business, and the plan for recovery offers downstream relief to more than taping the doors shut, then the plan goes forward.