This turns out to be one of the simplest and most enlightening overviews of a publicly traded company balance sheet I've seen: People I agree with, part one - Paul Krugman - Op-Ed Columnist.
It happens to the balance sheet that is keeping America up at night, which makes it all the more memorable. Beyond that, it's a nice reference for non-MBAs who still need to understand the base concepts.
The key takeaway is the difference between liabilities owed to shareholders and to bondholders. Shareholders are a key buffer in a publicly traded company. You can wipe them out and the company can go on. Bondholders can't be wiped out except through bankruptcy; at which point they and customers fight for the scraps.
The original Paulson plan (not the improved but rejected revised plan) might have worked if there was still some Shareholder equity left -- but once they're toast the corporation is dead and the money probably goes to the bondholders.