Bankruptcy is a major event that can have a significant impact on a company's capital structure. It is a legal process that allows a company to restructure its debt and other liabilities in order to avoid insolvency. Bankruptcy can have a major effect on a company's capital structure, as it can lead to the restructuring of debt and other liabilities, and can also lead to the sale of assets in order to raise funds.

When a company goes bankrupt, its capital structure is affected in several ways. First, the company may be required to restructure its debt and other liabilities. This can include reducing the amount of debt, restructuring the terms of the debt, or even writing off some of the debt. This restructuring can have a significant effect on the company's capital structure, as it can lead to a decrease in the total amount of debt and other liabilities, as well as a decrease in the amount of equity.

In addition, a company may be required to sell off some of its assets in order to raise funds. This can also have a significant effect on the company's capital structure, as it can lead to a decrease in the total amount of assets and an increase in the amount of debt and other liabilities. This can also lead to a decrease in the company's equity, as the sale of assets can reduce the company's net worth.

Finally, a company may be required to issue new equity in order to raise funds. This can also have a significant effect on the company's capital structure, as it can lead to an increase in the total amount of equity and a decrease in the amount of debt and other liabilities. This can also lead to an increase in the company's net worth, as the issuance of new equity can increase the company's value.

Overall, bankruptcy can have a major effect on a company's capital structure. It can lead to a restructuring of debt and other liabilities, a sale of assets, and the issuance of new equity, all of which can have a significant effect on the company's capital structure. It is important for companies to understand the potential impact of bankruptcy on their capital structure in order to ensure that they are able to manage their finances effectively.