In Golf, an Errant Shot = “FORE!” With LIV, it’s “CHAPTER 11!”
In golf, when you hit an errant shot, you yell: “FORE!”
LIV Golf hit one—and yelled: “CHAPTER 11!”
LIV reportedly received more than $5 billion in backing from Saudi Arabia’s Public Investment Fund.
It recruited some of golf’s biggest names with enormous contracts and appeared to have virtually unlimited financial support.
Now LIV reports between $500 million and $1 billion in liabilities—and several of those star golfers are among its largest unsecured creditors.
There’s an important credit lesson here:
A wealthy backer is not the same as a profitable business.
And the ability to provide financial support is not the same as a legal obligation to continue providing it.
As long as the money kept flowing, LIV could spend far more than its business generated. Once the funding stopped, the economics were exposed.
When extending credit, don’t be blinded by a prominent parent company, private-equity sponsor or deep-pocketed investor.
Ask three questions:
Is the support guaranteed?
Is it legally enforceable?
Can the customer pay us without another cash infusion?
Prestige is not liquidity. Prominent ownership is not a guarantee. And even the richest backer in the world can decide that enough is enough.
Your Customer Doesn’t Have to Look Risky to Be Risky
Trade Credit Insurance helps companies protect against unexpected customer nonpayment while intentionally deciding which A/R risks to retain and which to transfer.