Chalk this Wall Street Journal story (registration required) up to a sign that the credit markets must be really tight. Apparently, the credit markets have been so challenging these past few weeks, it's been all but impossible for companies debating a bankruptcy filing to obtain the often necessary debtor-in-possession (DIP) financing to manage the costs for "lawyers, layoffs and other restructuring necessary for a company's rebirth." According to one expert quoted in the story, "the number of lenders willing to do DIP financing has shrunk in recent months from 30-plus in the heydays of 2006-07 to maybe five or six now." Perhaps the silver lining in this is that if your suppliers were debating a bankruptcy filing, you may get a respite of a few extra weeks or longer while they search the factory floor or the server room for the pennies they'll need to file the actual papers. In all seriousness, however, this is but further proof that the great majority of companies are going to have to learn to manage through supplier insolvencies in the midst of the credit crunch.
- Jason Busch