Agreed, but thats precisely the definition of unsecured debt -- no collateral needed. Much like consumer credit card (revolving) debt is also unsecured as opposed to mortgages and auto loans. Also unsecured debt ranks lower in the pecking order than secured, second lien, preferred stock and in case of bankruptcy, DIP financing which enjoys super-priority when repaying from the debtor's estate.
Equity is meaningless for most US listed companies as their assets are mostly subpar. E.g. GM, Ford etc. -- are they auto companies or FINANCE companies?? for decades GM made no money from cars, but only from providing finance for buying its cars thru GMAC. Same goes for oil&gas. There was a company called ATP Oil & Gas that filed Ch. 11 the very next day of BP Horizon blowout in Gulf of Mexico. Turns out they had issued second lien notes on existing debt the day prior i.e. on April 18, 2010 .... the idiot CEO conveniently blamed the BK on Obama's then-declared ban on GOM drilling when clearly it was ATP that screwed up its finances, its operations and finally buckled under the huge debt.
As for, shareholders, they are routinely thrown under the bus because the BK laws are crooked and collusion extends to courts, restructuring lawyers, advisors etc. that feast off the carcasses of failed companies. Its a happy system for those that know how to profit from it, and retail stockholders are not "in the money" almost 90% of the time, unless they are buying blue chip banks or tech stocks, for which you need to be ultra-rich to begin with. And then why would anyone invest in equity and not real estate. US equities are a pure gamble, plain and simple, and the odds are always stacked against small investors.
