Final answer:
Creditors can pursue shareholders if a company's assets are wasted or used in bad faith, through the concept of piercing the corporate veil.
Step-by-step explanation:
When a creditor's assets are wasted or used in bad faith, creditors can pursue the shareholder for the debts owed by the company. This is known as piercing the corporate veil, where the limited liability protection of a corporation is disregarded.
For example, if a shareholder is using the company's assets for personal expenses or intentionally causing the company's financial downfall, the courts may hold the shareholder personally liable for the company's debts.
Therefore, creditors can go after the shareholder's personal assets to satisfy the company's obligations, if they can prove that the shareholder is responsible for the company's misappropriation of funds or acted with bad faith.