It's rare but it happens. When buying a co-op you buy shares of stock in a corporation that owns a building. If that corporation declares bankrupcy, the value of your shares may become worthless. This does not mean you lose your shares or your right to live there since you still have a lease. Most co-ops facing bankruptcy will restructure, and continue on. Always be sure to do your homework before making any purchase. Good Realtors, lenders, and attorneys can help ensure that your purchase is secure and stable.