I'd like you to provide evidence of the fact that often in bankruptcies, creditors get paid in full. My experience, through companies I have worked for and with is that when a customer or supplier enters bankruptcy, it's very rare for unsecured creditors to get anything more than single digit percentages at best and even secured creditors get a fraction of what they are owed.
There are many examples where the creditors took the company out of Chapter 11 bankruptcy and were not only made whole, but made a killing. Charter Communications is one example. Orange County went through a Chapter 9 bankruptcy (which is the code governing municipalities), and the creditors were made whole. It depends largely on why it went into bankruptcy. If it was a cash flow issue, or some bond convenants were breached, then Chapter 11 is usually forced by the creditors in order to protect their claims. Another example is AMBAC (a bond insurer), which went bankrupt in 2010. Its "claim" bonds are trading well over 100 cents on the dollar.
The canonical recovery value used in the credit default swap market for corporations (both US and European) is 40%. That's for senior unsecured debt. Of course, that implies that the recovery will actually be much larger than 40% because there is generally a huge risk premium to be earned in buying defaulted debt, and the recovery value is defined as the market value of the debt just after a default. Often, recovery values are much higher, sometimes exceeding 100%, which is weird but does happen.
Secured debt, by the way, is very likely to be paid back in full in general. Junior creditors are very likely not to be paid back in full. On the other hand, they are usually paid a very high interest so that they might prove to be winners overall if the bonds pay for 5-10 years.
You made a claim that 95% of businesses end in bankruptcy - I'd like to see you back this up. As I said, in my experience there are two usual ways for a business to finish up; to be purchased in full or in part by another business or to be wound up in an orderly fashion.
I didn't actually claim that 95% of businesses end in bankruptcy. I used it as a mathematical example that if a business has a 1% chance of bankruptcy every year, which is on the low side in the US, at least as implied by the credit default swap market, then it is virtually inevitable that it will go bankrupt in the long term. This is simply a consequence of mathematics. The probability is doesn't go bankrupt in N years is 0.99^N, which is a small number for large N.
The vast majority of businesses are owned and operated by a single person. If I think of Martin the Handyman, Dave the Moleguy, Mike and Annie who used to own the wine shop in town or any of the dozens of IT contractors who have been through my doors over the decades then unless they screw up badly their businesses were or will be wound up in an orderly fashion when they decide that they don't want to work any more. They will pay the last bills, draw the last of their capital out of the company and then they and their accountant will shut the business down.
Even larger businesses in difficulty tend not to go bankrupt in my experience. Some do, many in high profile ways, but they seem to share a common trait - they are badly run and those managing them haven't made provision for choppy economic waters. Even where the business is completely done - good management allows shareholders to retrieve some value by selling off the fixed assets, intellectual property or brand value even if it is for a small percentage of its true value.
It is far more often that a company avoids bankruptcy by renegotiating with its creditors when it gets into a little trouble or breaches some covenants. That's because bankruptcy can be a long and expensive process. Still, one side or the other might force a bankruptcy depending on how the negotiations go. A company manager who avoids bankruptcy by conceding to the terms demanded by the creditors might actually be doing a worse job for the owners than one who enters bankruptcy. You have to look at the details.
Unless you can provide some figures to back up your claim of "95% of businesses go bankrupt" then I think you are mistaken and Donald Trump is unusual in having quite so many businesses fail from under him.
Once again, the 95% figure is a strawman. Regardless, Donald Trump's six bankruptcies (5 of which involved casinos, and 4 of which happened in 1992) are not unusual in the least given the number of businesses he's been involved in. Most investors have invested in companies that go bust. Usually though don't get tainted by them. It's different for Trump because he slaps his name on everything.
