Canada

Yep, it's the playbook private equity uses too. Buy a healthy profitable company and then leverage it to the tits to pay themselves back. The company is saddled with debt and an obligation to service that debt and creates a situation where the only way the company can survive is if they grow rapidly. Sometimes it works out and private equity hits big, other times it doesn't and the company goes under. But who cares, fuck those workers and their livelihoods right?

Agreed. Capitalism working as intended

It's all in the framing:

1. Create a company, making sure that personal assets are insulated from corporate liabilities.
2. As a corporation, raise funding through equity and debt to support investing in offices, staff, etc, as needed to operate a new venture. Lenders assess the business to determine if it's a good credit risk, making money if the business succeeds and taking a potential loss if it doesn't.
3. Company goes bankrupt.
4. Company assets are liquidated and disbursed to debt holders (who knew the risks going in) to minimize their losses while owners and employees are insulated from personal liability.

Why? To encourage entrepreneurship: who would want to start a restaurant or coffee shop if they knew they would be personally liable if the business failed?

Is it possible to misuse limited liability corporations for nefarious purposes? Of course. But it's absurd to imply they don't serve an important social purpose.