Q: On November 1, 2017, a Colorado cannabis company, Phoenix Life Sciences, declared bankruptcy and immediately reopened.
How can the new company, Panacea Life Laboratories, using the same equipment, work space, employees, etc, now magically NOT be liable to pay employee wages and other legal debts incurred prior to that bankruptcy?
A: The United States Bankruptcy Court for the District of Colorado website shows no such case filed under that name. Generally when a company files bankruptcy (Chapter 7), it's assets are liquidated and the funds are used to pay creditors. Wages owed to employees have one of the highest priorities. Those who purchase the assets (even former owners) from the bankruptcy trustee are free to start a new business.
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