[juris]

As my name suggests, I have a law degree. The magic word you are looking for is conversion.

For a company, there are 2 types of bankruptcy. The first is Chapter 7 which liquidates everything and pays in a statutory priority, with unsecured creditors (Sorry MS and the rest, that's you) getting paid last. Usually but not always that's zero or close to it.

Chapter 11 is an attempt to continue the business going forward, with a trustee assigned to manage the assets. Unsecured are given a written "plan" (yes, that's actually the legal term) proposing to pay a fraction of the debt, and there is time to object to the plan. The bankruptcy judge makes the final call, and when the plan is finished, the remainder of the debt is wiped clean, and the business moves forward.

If either bankruptcy was filed, MS and the rest would know because they would be listed as unsecured creditors and given notice. What I find a much more interesting legal question is whether certain deposited funds could be classified as held in trust and illegally converted, which would not be dischargeable in bankruptcy in most instances (like poker, it depends. That's not the point here). I don't know the answer to that question off the top of my head.

I couldn't find a bankruptcy filing on the computer system known as PACER, which is where it would show up. But b/c it's a pay as you go site, I didn't try all that hard so I can't say one way or another. If significant interest from the zoo, I'll eat the cost and do a thorough search but my guess is they just closed up shop.