These are not client stories. They are well-documented public failures, chosen because the warning signals are on the record and can be checked. Each one shows a different way a credit risk framework breaks: slow payment used as funding, structure hiding cash, concentration in one group, and leverage running out of time.
Carillion
Compulsory liquidation, United Kingdom · 15 January 2018
Carillion was one of the UK government's largest construction and facilities-management contractors. In July 2017 it announced an £845m contract provision, followed by further write-downs and a suspended dividend; six months later it entered compulsory liquidation with reported liabilities far exceeding its assets. The National Audit Office found around 30,000 suppliers, sub-contractors and other short-term creditors were owed money at the point of collapse.
Signals available beforehand
- A very large contract provision announced mid-year, followed by further downgrades — a pattern of successive rather than one-off bad news.
- Extended supplier payment terms used as a source of working capital.
- Heavy dependence on a small number of large, low-margin contracts.
- Revenue and profit recognised on long-term contracts far ahead of the cash arriving.
Unsecured trade creditors carried the loss. Suppliers with a group-level view of exposure and event-driven limit reviews could have reduced exposure between the first profit warning and the liquidation — a window of roughly six months.
Wirecard AG
Insolvency application, Germany · 25 June 2020
Wirecard was a DAX-listed payments group. On 18 June 2020 its management board announced that €1.9bn of cash reported as held in trustee accounts could not be located and that prior audit opinions might be unreliable; the company filed for insolvency proceedings a week later. Questions about the group's accounting had been raised publicly for years before the collapse.
Signals available beforehand
- Repeated public allegations about accounting practices, and a special audit that could not confirm the reported balances.
- Delayed publication of annual accounts and a qualified audit outcome.
- Material revenue and cash attributed to opaque third-party arrangements in jurisdictions far from the operating business.
- Complex group structure that made it hard to identify where cash and obligations actually sat.
Scale, listing status and a clean audit history are not credit controls. Where an entity's structure obscures where cash sits, exposure should be sized against what can be verified, and adverse media should feed the credit file rather than sit with the compliance team alone.
Greensill Capital
Administration, United Kingdom · 8 March 2021
Greensill Capital financed supply-chain receivables and relied on trade credit insurance to make those receivables saleable to investors. When its principal insurer declined to renew cover at the start of March 2021, the funding model stopped working within days and the company entered administration. Its exposure was heavily concentrated in a small number of borrower groups.
Signals available beforehand
- Extreme concentration: a large share of the book tied to one client group.
- Dependence on a single risk mitigant — insurance cover — with a known renewal date.
- Rapid growth in receivables finance without a matching diversification of counterparties.
Concentration risk and mitigant risk are the same risk viewed from two sides. A limit framework should cap exposure by group and should treat the expiry of insurance, a guarantee or a facility as a monitored event with its own alert.
Thomas Cook Group
Compulsory liquidation, United Kingdom · 23 September 2019
Winding-up orders were made against 26 companies in the Thomas Cook Group on 23 September 2019, after recapitalisation talks failed. The UK Civil Aviation Authority launched what the government described as the largest peacetime repatriation, bringing home around 150,000 travellers. The group had reported very large first-half losses earlier that year and carried substantial debt.
Signals available beforehand
- Successive profit warnings and a large impairment in the year before failure.
- A leveraged balance sheet with debt service consuming operating cash.
- Publicly reported rescue-financing negotiations — a late-stage signal that should freeze new exposure.
- Structural sector pressure affecting the whole peer group, not one company.
When a counterparty is publicly negotiating emergency funding, the credit decision is no longer about score bands. Hotels, transport providers and suppliers exposed to the group were unsecured creditors across 26 legal entities — a reminder that exposure has to be aggregated at group level to be understood.
The pattern across all four
- Every one of these failures was preceded by public, dated disclosures — provisions, delayed accounts, rescue talks or insurer withdrawal. None required inside information to see.
- In each case the loss fell disproportionately on unsecured trade creditors, who ranked behind secured lenders in the insolvency.
- Exposure was spread across multiple legal entities in a group, so no single account looked large enough to trigger review.
- The decisive question was never the score at onboarding; it was whether anyone re-read the file when the counterparty changed.
Scores, credit limits, filings and ownership changes — aggregated to the group and monitored continuously.
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