Prosper does not owe money to either its investors or employees. Equity investors are owed nothing and lose their shirts if the company can't pay its bills, and employees can be let go if a company can no longer pay them.
What Prosper said about its debt is basically true: it has very little debt in the balance sheet meaning of the term. Its problems involve cash flow. For example, it has very little "debt" to its employees at any given time because employee salaries accrue (and become "debt" for balance sheet purposes) only for a brief period before each paycheck is paid, so employees are never owed more than one paycheck (plus incidentals like accrued vacation) at any given time. But fact of the matter is, Prosper has to find a way to pay its employees their salaries not only this week but next year. Even though the money to pay those future salaries isn't called "debt" on the balance sheet, even though they're not called "expenses" until they actually happen, Prosper will have to come up with the money all the same or it will be unable to pay its employees and will go under.
Relatively debt free companies and individuals go under all the time because their immediate expencses exceed their income and savings, and no is willing to lend them anything. Cash flow, not debt, is the problem.
