What happens when a market maker goes bankrupt during / as a result of an over-extended unsupported position?

The meme stocks have me thinking about the exchange backend. What happens when a market maker / money maker has an extreme position in a stock that is now unsupported by shares, just derivatives and loans on short positions and during a long drawn out fight with retail is bankrupt during the squeeze to eventually cover their position? How might that affect the retail shareholders who legitimately sell with million + profits per holder? How do the brokerages of the retail shareholders get the money to cover the settling positions in retail?

With billions of potential losses, no rescue loans, the investment market maker would liquidate their other positions, pushing the overall market down quickly to help cover, but what then? The market dumps, the market maker goes bankrupt, the meme stock rises….will the retail shareholders accounts settle with the profits or?