Maybe they are. I would assume that the government has some discretion over when to intervene, since financial status is dynamic, but I don’t know.

The government can't generally arbitrarily seize an operating business. (Indeed, in the recent Johnson & Johnson court case we saw the opposite: they asked to undertake bankruptcy proceedings early because they're facing a large liability, the government said no, not until you're proven to be actually bankrupt)

Sounds like a bit of a hazard: the difference between insolvent or not for many entities is just accounting conventions. Lock in some non-MTM losses-- wham!-- insolvent.

Why should bankruptcy protection be denied to any entity that would be unquestionably qualified if they simply took an additional legitimate action that would make their creditors worse off?