It is exactly that; it happens every day. Company law appears to have been formulated to protect well-off people from the consequences of their own incompetence; regrettably, it always seems to be at the expense of those who do not have the luxury of a limited liability company behind which to hide, and who are as a result responsible in law -as well as morally- for their own actions, and their own debts. Unlike those who steal from us, who have a moral obigation only. One can perhaps forgive (though not excuse) genuine incompetence; the trouble is that this legislation is so often used deliberately to defraud.
The egregious R*ssell Ch*rch, to whom I referred to obliquely above, was subsequently investigated by the Department of Trade and Industry, but it's almost impossible to prove deliberate fraud in these cases, so his many creditors got nothing. So far as I know, he continues to run the same business behind the cover of the latest of a long string of "front" companies.
I don't for a moment suggest that Dave Bulmer is in any way a comparable case, or that he has ever had dishonest motives; it is difficult, though, to understand why he has persisted in what appears to be such selfish and unreasonable behaviour, and it is certainly the case that current legislation not only makes such things possible, but seems almost to encourage them.