You posted "He just bought the company for $300k if the loan isn't repaid." And "He got the entire company if the loan, plus interest can't be repaid in 12 months". The "entire company" includes both assets and liabilities. I already gave you one very good explanation for why this investor would want to own this company. I'm still waiting for your explanation as to why you think this investor wanted to buy this company knowing he would be responsible for over 4 million in debt.