This seems to be a common occurrence these days,but i was unaware of this particular site being in trouble( modnique.com),and it's sister site bidz.com ,have gone into liquidation and despite this knowledge,they continued to take (and receive payment for) orders.Many,many people have been stung by this (http://www.sitejabber.com/reviews/www.modnique.com )and i can include myself in that number.It was not until i thought it had been a long time since ordering that i Googled what had happened to the site ("improvements being made to site,we'll be back" being up for a while )that i found out what the truth was.Anyone else been stung (i called my bank,but good luck i expect getting money returned.Mine was a relatively small order,but i feel for the poor suppliers and larger order customers.This was truly a great place to shop in it's time.
Bankruptcy laws are complex things.
In AU, the law says a company can't trade while insolvent. That generally means they can't take orders they can't fulfil, and the directors are liable for prosecution if they do.
When a business is in trouble, the people they owe money to can seek to have administrators appointed. The administrators best outcome is to run the business successfully to repay the debts and keep it a going concern. There is no particular reason to not deal with a business in administration, as long as you know they could "go broke". Generally, though, administrators are very conservative and will seek to fulfil orders etc.
In some cases, however, it is clear that keeping the business open will lead to a bigger loss. In that case, the court appoints liquidators (often the same actual people as the administrators) whose job it is to close down the company in an ordered fashion and sell whatever they can to collect as much money as possible.
So often you will see a going out of business sale.
In the USA they have similar rules called things like Chapter 11 and Chapter 7.