Warning: Credit Risk is Spreading

August 2008 by

On June 29, David Schier, credit manager for Jacobus Energy, a Milwaukee, Wis.-based fuel supplier, was enjoying a relaxing Sunday until he received a call from the company's sales rep for Indiana. It was bad news. The rep had heard that one of Jacobus' bigger customers - Alvan Freight, a Kalamazoo-Mich. trucking company - was about to file for bankruptcy protection. Jacobus' owner was promptly informed, and the Alvan account was immediately locked to prevent any fresh shipments going out.

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