And they will continue to exist. The name or Trade Mark has value. So those will be sold off to someone else, hopefully with the IP.

As a sibling comment noted, you're essentially talking about the products, not the companies. They're distinct entities that are temporally correlated, but you should reason about them separately.

It's possible to have a perfectly good and marketable product, and a terribly owned or operated company.

In this case, while the company has given up the ghost, the products are still valuable. Them most likely outcome is that some other company will acquire those products/brands and continue to extract value from them on the other side of a bankruptcy.

To do anything else would be to leave money on the table, which is not what PE owners do.