My position is that it is morally wrong to run a business, at any time, such that ALL creditors cannot be cleared.
In an ideal world this is true, however there is a clear distinction between reckless trading and those who trade fraudulently. Some businesses who find themselves in difficult circumstances will try valiantly to trade their way out of trouble, perhaps suffering from an overdose of optimism believing that recovery is within sight.
Those who trade fraudulently have a more sinister premeditated motive.
In either case it is difficult see the full picture until the company has folded.
Understandably this becomes an emotional issue particularly in the case of an FTO whose creditors include private individuals who can sometimes feel the loss more personally than would a trade creditor.
To return to thread, and notwithstanding the above, most if not all FTO's are struggling to survive through a global economic crises. I believe that as members of the aviation fraternity we should act responsibly by ensuring that rumour about the financial health of an organisation is not circulated unless clear evidence is present. Who we select to receive our hard earned cash for initial and further training can in part be based on the excellent references gleaned from this forum in relation to instrucor quality, aircraft condition, customer service etc.
Once that selection is made, prudent payment terms for services rendered will eliminate or seriously reduce any potential losses should the worst come to pass.