Abstract: This Essay analyzes and assesses the approach of governmental entities to the bankruptcy filings of large, regulated companies. Regulated firms often enter Chapter 11 seeking to exploit bankruptcy law provisions that allow them to take actions that their regulators could block outside of bankruptcy, thereby undermining regulatory enforcement and oversight. As a result, governmental entities often react defensively to a bankruptcy filing, asserting that bankruptcy law does not displace their power over the regulated firm. This tactic is often unsuccessful, as we show by describing the doomed efforts of the Federal Energy Regulatory Commission (FERC) to maintain their statutory authority over Chapter 11 firms. We argue that governments would fare better - and the public interest would be better served - if they participated in, instead of resisting, the bankruptcy process, including by acquiring expertise in bankruptcy law and providing financial support to distressed companies. We illustrate this argument with a case study contrasting the approaches of the California State Attorney General's Office and the County of Santa Clara to the 2019 bankruptcy filing of a hospital system, Verity Health System of California. The County of Santa Clara succeeded in achieving its policy goals where the California Attorney General (like FERC) failed, because the County retained bankruptcy lawyers and took bankruptcy law on its own terms, acting in bankruptcy instead of against bankruptcy.