What Happens To Your Business Assets In A Personal Bankruptcy?

This article originally appeared on Forbes.  The original article can be found at: Click Here

In my last article, we saw what can happen when a business bankruptcy intrudes on personal finances — with potentially disastrous consequences for an innocent spouse.

But what if you’re facing personal bankruptcy despite owning and operating a successful business? And what better way to examine that scenario than through a hypothetical using the biggest (in terms of estimated net worth) billionaire from the presidential primaries, former New York City mayor Mike Bloomberg?

When A Billionaire Isn’t Really

First of all, let me say that this article is completely apolitical; I’m only weighing in on financial considerations.

Second, Bloomberg LP is doing just fine. This is the company Mr. Bloomberg founded, and his 88% ownership interest accounts for the vast majority of his wealth. There are no indicators a business bankruptcy is anywhere on the horizon.

But that doesn’t mean a personal bankruptcy isn’t a possibility.

Bloomberg didn’t stay in the race long enough to release his tax returns, so his personal financial position isn’t a matter of public knowledge. Given his Super Tuesday spending, it’s safe to assume he’s doing all right, but what if he wasn’t? Could his immensely valuable business holdings save him from personal bankruptcy, keeping in mind that value isn’t the same thing as liquidity?