Actually it very much falls under the definition of "distressed asset". If management is the problem (and we all know that it is), then it can be fixed, as long as the assets are greater or at least equal the liabilities. I didn't read their financial reports, but I'm sure some community...
Because it is an interesting concept that is somehow (very badly) working. Quite solid community that is willing to spend money, as long as the proposition is attractive....
The problem of this game is failed/amateur/outdated management. This can be fixed with a proper crew.
It's impossible to make money with or without investing. Entropia is a casino. Invest your money elsewhere. In Entropia you will just blow it for a momentary rash of "maybe"...