Case Reference: #2024-PORT-0034

Client profile: European industrial conglomerate with operations in automotive components, industrial machinery, and chemical intermediates. Annual revenue €2.1 billion. Customers in 40+ countries.

Portfolio: 47 receivables across 12 countries. Total exposure: €3,217,000. Average age: 194 days past due. Range: €12,000 to €340,000 per claim.

The situation

The conglomerate's credit management department had been managing the portfolio internally. Each receivable was assigned to the relevant business unit's finance team, who followed up with their own commercial contacts at the debtor. The process was well-intentioned but structurally flawed: the people responsible for collection were the same people responsible for the commercial relationship. They sent polite reminders. They accepted promises. They extended deadlines. The debtors, recognising this pattern, treated payment as optional.

The CFO engaged us after a quarterly review revealed that the portfolio had grown by €800,000 in the previous quarter despite the internal team's efforts. The brief was direct: recover as much as possible, as quickly as possible, without destroying commercial relationships that the business units wanted to preserve.

The triage

We triaged the 47 receivables into four categories based on debtor solvency, claim documentation, jurisdiction, and enforcement potential:

Category A (high recovery probability): 19 claims totalling €1,480,000. Well-documented claims against solvent debtors in jurisdictions with fast-track enforcement instruments. Expected resolution: amicable phase, 30-60 days.

Category B (medium recovery probability): 14 claims totalling €1,120,000. Claims with adequate documentation against debtors with uncertain solvency or in jurisdictions with slower enforcement. Expected resolution: amicable with legal escalation, 60-120 days.

Category C (low recovery probability): 9 claims totalling €430,000. Claims with weak documentation, disputed terms, or debtors showing signs of financial distress. Expected resolution: selective legal action, 90-180 days.

Category D (recommended write-off): 5 claims totalling €187,000. Claims against insolvent debtors, debtors in jurisdictions without practical enforcement, or claims with expired limitation periods. Recommended action: write off and close.

Execution

Month 1: We initiated amicable engagement on all Category A and B claims simultaneously. The engagement was conducted by jurisdiction-specific specialists who contacted debtors in their local language, referenced local enforcement instruments, and presented clear timelines. The tone was professional and informed — the debtors recognised immediately that this was not another internal follow-up call.

Category A results: 12 of 19 claims resolved amicably in the first 30 days. Recovery: €890,000. The resolution rate confirmed our triage assessment — these were debtors who could pay and would pay when confronted with professional enforcement capability.

Month 2-3: The remaining 7 Category A claims and all 14 Category B claims were escalated to formal demand phase. Demand letters on local counsel letterhead, formal notices of intent to file, and — in 6 cases — applications for pre-judgment asset attachments.

Additional recoveries: €740,000 across 11 claims. The pre-judgment attachments in the Netherlands, France, and Germany were particularly effective — all three debtors settled within two weeks of the attachment.

Month 3-6: Legal proceedings initiated on 8 remaining claims across 5 jurisdictions. Payment orders filed in Germany (2 claims), France (1), Italy (2), Spain (1), and Poland (2). Simultaneously, selective engagement on 5 of the 9 Category C claims where our due diligence identified viable enforcement paths.

Legal phase recoveries: €520,000 across 7 claims. One Italian claim was contested and remains in litigation.

Category C recoveries: €190,000 across 3 claims (the remaining 6 were closed without recovery after cost-benefit assessment indicated that enforcement costs would exceed expected recovery).

Results

Total recovered: €2,340,000 out of €3,030,000 in pursued claims (excluding Category D write-offs). Recovery rate: 77% of pursued claims, 89% of Category A claims.

Timeline: 80% of recoveries achieved within the first 90 days. Remaining recoveries achieved within 180 days.

Commercial relationships: The CFO reported that no commercial relationships were damaged by the recovery process. Three debtors who had previously been unresponsive to internal follow-up resumed regular ordering after their balances were cleared.

The portfolio intelligence note

The conglomerate's experience illustrates a pattern we see consistently: internal credit management teams are structurally disadvantaged in debt collection because they carry the dual burden of collection and relationship management. Professional recovery separates these functions, allowing the commercial team to maintain the relationship while the recovery team creates the enforcement pressure that produces payment.

If you're managing a portfolio of international receivables internally and the aging trend is deteriorating, the pattern is predictable — and reversible. Brief our portfolio team with your receivables data for a triage assessment and recovery projection.