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For a free market to operate appropriately when a company fails it must be allowed to fail. Nature must take the course and allow the market to dictate the value of those assets and allow another company to buy them up for the appropriate value. What shouldn't happen and is an error of the age is having taxpayers, via the government, bail a company out. This is a complete contradiction of logic and sense.
Companies almost always fail because they are doing something wrong. If the market doesn't want what a company is doing it will fail. If a company gets greedy and gets called out on their greed they will fail. If a company becomes stagnant and avoids innovation they will most likely fail. Failure is a part of bad business. And success is a part of good business. We want more good businesses. So when a business fails it should be allowed to fail. They are obviously doing something wrong. Perhaps they are not treating their employees right, maybe their products sucks or maybe they simply are no longer needed. Whatever the case, the company is over and its time is done.
The idea of bailing out a business when they have reached the point of failure is just mathematically, rationally and emotionally ridiculous. This is like trying to prop up failure and say that it doesn't exist. It is going against the dictates of the consumers and telling them that they don't know best. The whole idea of bailing out a company is something that shouldn't even be discussed in a free market, that is, a correct market.
Now I know what you're thinking. But what about when a company is "too big to fail". I was unaware that such a case existed. What exactly is too big to fail? Who determines what's too big and what's not? How does this make any sense in a free market? How does saving a failure create any good? Why would we want to go against nature? Why would we ever want to force failure on somebody? Is there such a thing as too small to succeed? The whole rational behind companies being too big to fail is elementary at best.
So what would have happened if these "too big to fail" banks and businesses were not "bailed out"? The same thing that is going to happen anyway! Only when they fail this time it is going to be exponentially worse. Bailing out a bank is not possible. It is mathematically not possible. There is no such thing as a free ride in nature and to think that such a case exists in the world of business is short-sited and shows a complete lack of understanding of the dynamics behind markets. A bailout can't save anything. Bailouts only exacerbate problems.