Large company insolvency increasingly common

The recent rumblings about large companies possibly seeking bankruptcy protection should serve as a warning to the
Large company insolvency that is sweeping the market may hurt smaller businesses and, according to global trade credit insurer Euler Hermes Canada, the protection of accounts receivable should be a major consideration to companies dealing in domestic and international trade.
“Many people assume that because a company is large and established that the risk of insolvency is low,” Robert Labelle, Euler Hermes Canada senior vice president , says. “However, there have been several notable cases of large companies seeking bankruptcy protection in the past few years that should trigger an increased diligence on the part of businesses that ship on open account terms to any size company.”
Recently, a number of large Canadian and U.S companies covering a variety of market sectors have arisen at or near the top of the Euler Hermes major worldwide insolvencies list, including: Stelco Inc (Mining, steel); Bocenor Group (Forestry, building materials); Meubles Fly America Inc, Ailes de la Mode, Denninghouse (Retailing); Refco Inc (Financial Services); US Air, Delta Air, Northwest (airlines); Cornerstone Propane Partners, LP (oil and gas exploration and production); Trump Hotels & Casino Resorts Inc. (media and entertainment); and, Delphi, Oxford Automotive Inc. (automotive).
According to Euler Hermes, the effects of a major corporate insolvency can be far-reaching, as every company that has done business with the entity seeking bankruptcy protection will see some sort of interruption in expected cash flow.