The cold hard truth about the First Brands bankruptcy showed us that though unthinkable, not unsinkable. Understanding what is hidden under the ‘improving credit narratives’ is imperative.
The First Brands bankruptcy is “a case study in the critical importance of trade credit insurance for companies that extend terms to large customers. It’s a liquidity, earnings and risk governance tool, not simply an insurance product, says Todd Lynady of WTW. In his article he explains how companies were fooled by a classic credit trap and he outlines the impact on the unsecured creditors. He shares food for thought that is a smorgasbord of warning signs for risk managers.
