Bankruptcy filings by U.S. corporate contractors could create numerous issues in an infrastructure project's ability to be completed on time, according to Fitch Ratings in a new report. Nevertheless, Fitch's study found that corporate contractor bankruptcies do not necessarily lead to project defaults with any certainty. In fact, most of a contractor's ongoing projects continue as expected in most distressed scenarios. Lack of liquidity is the most pre-eminent driver of contractor corporate bankruptcies, coupled with other catalysts like mismanaged growth, cost overruns and project disputes. This makes available liquidity key for contractors when Fitch assesses completion risk. Distressed contractors have often struggled to manage their working capital and effectively monitor customer credit quality. Historical examples of this include Gibbs Construction, Inc. and Guy F. Atkinson Company of CA, Inc., which suffered from the failure of major customers. Smaller contractors are more susceptible to this risk. Another potential pitfall lies with contractors that routinely utilize much of their revolver liquidity when they do not need to. Fitch cites JWP, Inc. as a notable example of this risk in its study. Credit investors have sound justifications for their assessment of potentially high credit risk for engineering and construction debt. Fitch estimates a higher risk level, particularly for small firms, and weaker overall credit metrics for the sector. 'U.S. Engineering and Construction Bankruptcy Study: Implications for Infrastructure Project Investors and Creditors' is available at 'www.fitchratings.com' or by clicking on the above link.