How is it legal to be able to get a loan to buy a company, then transfer that loan to the company you bought, then let the company burn to the ground from the crushing debt?
This called a "leveraged buyout". Everyone who learns about them is shocked, and they absolutely should be illegal, but they aren't. It's very common for companies purchased in this way to go bankrupt, because the debt is too heavy a burden. Many name brand companies have gone down over the last decade because of this.
Last decade? Leveraged buyouts were a big thing in the 80s/90s, so this has been going on for over 30 years. This research showed that about 20% of LBOs resulted in bankruptcy: https://www.institutionalinvestor.com/article/b1gfygl4r8661f....