Can any lawyer clear this up for me? If the company ends up having no commercial success and the lawsuits for damages rack up, can they just close the company file for bankruptcy and face no consequences? Or is there some civil or criminal risk to this behaviour?
https://en.wikipedia.org/wiki/Piercing_the_corporate_veil
If this were happening in the real world, they would have to personally back some of the corporate debts before banks would lend them money. But this is Silicon Valley, where banks and VCs just give away money to their buddies.