inability to meet financial obligations

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He further stated that budgetary cuts will impact the institution in numerous ways as the institution will have difficulties in attracting, retaining and motivating staff, resulting in high levels of staff turnover, an inability to meet financial obligations, a scaling down of activities, a reduction in academic programmes offered and staff lay-offs or retrenchments.
These factors include, among other things, the exercise of withdrawal rights by tendering interestholders; federal, state or local regulations; the inability to meet financial obligations on additional loans; pre-payments of mortgages; operating results at properties underlying mortgages; uninsured losses and potential conflicts of interest between the company and its affiliates and advisors.
Inability to meet financial obligations is one of the first indicators of a failing company.