Right, but in both cases you have to pay out of retained earnings. You can't "pay out using borrowed money"! You can borrow to get more cash on hand, and then pay out, but that's not the same thing: dividends are never allowed to take the equity in the company below zero. Dividends are always paid out of profits that have already been realised, and either kept as cash/investments or put into capital.
(Having said that I'm not a corporate accountant so I'm open to correction, but no one has posted any technical details about this matter that make me think I'm mistaken, yet.)
> Borrowing to pay the owners makes "wind down the company" more attractive by letting the relevant decision-makers cut in line.
This bit I don't understand. It reads like a criticism, but what's wrong with winding down a company that's not deploying its capital as efficiently as it could be? (Wrong economically/financially, that is; I've already explained that I'm in sympathy with the effect on customers and workers.)
(Having said that I'm not a corporate accountant so I'm open to correction, but no one has posted any technical details about this matter that make me think I'm mistaken, yet.)
> Borrowing to pay the owners makes "wind down the company" more attractive by letting the relevant decision-makers cut in line.
This bit I don't understand. It reads like a criticism, but what's wrong with winding down a company that's not deploying its capital as efficiently as it could be? (Wrong economically/financially, that is; I've already explained that I'm in sympathy with the effect on customers and workers.)