Wouldn't someone buy their capital equipment and IP for pennies on the dollar if they went bankrupt though? So I don't know how much it would destabilize the economy, it would just shift around who runs the company. 'Sig' would cease to exist but 'this mass of capital that makes guns' and possibly even the employees, would still be around.

In theory, yes. My guess is they would be bought by an already huge corporation, leading to even bigger monopolies.

Does anybody here have an example of this happening? "Nobody knows" is kind of an indication how often this happens.

My preferred alternative would be forced conversion to worker owned cooperative BTW.