5 Biggest Failed Companies Due To Poor Management

In this piece, we will take a look at the five biggest failed companies due to poor management. For more companies, head on over to 10 Biggest Failed Companies Due To Poor Management.

5. Financial Corporation of America (FCA)

Asset Value at Time of Bankruptcy: $34 billion

The Financial Corporation of America (FCA) was the holding company for savings and loan ‘thrift’ firm the American Savings and Loan Association. The thrift was set up in 1922, and the Financial Corporation of America (FCA) was headquartered in Irvine, California.

The Financial Corporation of America (FCA) started to shake in 1984 when it posted a $1.1 billion loss due to turmoil in the real estate industry. Its problems would be reminiscent of the 2008 financial crisis that took place decades later, as the American Savings and Loan Association had also invested heavily in mortgage backed securities (MBS). These securities use mortgages as their asset base, and offer buyers a profit from the amount of mortgage that is paid by a homeowner. However, if the mortgage goes bad, the MBS is worthless. American Savings posted another loss in 1987, and the Financial Corporation of America (FCA) filed for bankruptcy a year later.