Great Depression: Buying banks

[Oaty]

I read a few books on the great depression but looking to get more detail on the buyout of banks. Part of the great depression was fueled by greed once it started. Banks had money owed to them when they went bankrupt and of course there's eager businessmen just ready to buy that banks assets. I'm looking for details on how banks were able to buy the assets (debt owed) and could just bypass owing any money to the holders(savings account) granted I understand there's bankruptcy "protection" but it sounds like a dirty loophole so that the assets of the bank can be bought for pennies on the dollar allowing for windfall profits while depositors get screwed. Then the government came along and created the FDIC (insures bank accounts up to 250k only 2.5k when it was first started)

So I'm hoping for a reference to a good book that goes into detail about this.

[Mangudai]

Corporate law can get very complicated, but I think I understand the 101 level answer.

If you bought a bank (not bankrupt), you would assume assets and liabilities.

During bankruptcy, the court sells off all the assets and uses the funds to pay the liabilities in order of precedence. When you buy assets from the court, that's it, you don't buy the whole bank just certain assets. Ideally the court would have an auction for the assets, in practice it might only solicit a few offers and take the highest one.

If you bought a few assets from a bank and then the bank went bankrupt, you might face a civil suit. The plaintiffs could argue you underpaid and owe them money. If you convince the court you paid a fair price, you should win.