What happens if a carve-out leaves the seller's remaining company with no assets to pay its debts?

This is a genuine risk worth taking seriously, and not just from the seller's side. If a carve-out strips valuable assets out of the corporation, leaving what remains unable to pay its existing debts, the seller's own creditors can pursue whatever remedies are available against that now-hollowed-out corporation, and the seller personally may face exposure if they were involved in structuring a transfer that left creditors unable to be paid.

For a buyer, the concern is different but related: transfers made specifically to put assets beyond the reach of creditors can, in some circumstances, be challenged and unwound after the fact, which can create real uncertainty about whether the carve-out you relied on will actually hold up. This is a reason to be cautious about a carve-out that looks designed mainly to strip value away from creditors rather than to genuinely separate parts of a business for legitimate commercial reasons.

If a proposed carve-out would leave the remaining corporation looking insolvent or unable to meet its obligations, that's a signal to slow down and get proper advice, both about the seller's own exposure and about whether your side of the deal is built on solid ground. A business lawyer and an accountant should review the numbers before the carve-out proceeds.