A California physician, who operated his practice as a corporation, filed a Chapter 7 (liquidation) bankruptcy proceeding. In Chapter 7, "all" of the debtor's assets are sold, with the proceeds used to pay the creditors.
The physician had accumulated nearly $2 million in a retirement plan. Federal law exempts all qualified retirement funds from a creditor's reach, even if you live in a state where you can not use federal exemptions for other types of assets.
The physician's creditors challenged the $2 million exemption, on the grounds that it was unfair. While agreeing with the creditors that the exemption was unfair, a court acknowledged that it was powerless to ignore the exemption.
As a result was that the physician eliminated all of his debts and walked away from the "liquidation" bankruptcy proceeding with $2 million.
Had the physician simply withdrawn the $2 million from the business and invested it in a personal portfolio outside of a retirement plan (as many small business owners would have done), he would have lost $2 million.