Woolies, MFI and the other company failures we have seen in the past few days are only a foretaste of what is likely to be a grim procession in the coming weeks.

Corporate undertakers say that they are swamped with work, particularly in retailing, and predict more corpses before the year is out. After Christmas, it will just get worse. So far, we have seen only the very vulnerable succumb, those that were in delicate health to start with. Both MFI and MK One, the discount retailer that fell over last week, had collapsed once already this year.

They were both saved by buyouts, but were not strong enough to withstand the downturn in consumer spending combined with the vicious squeeze on cash as banks tightened their belts and credit insurers withdrew cover for their suppliers.

As if this were not bad enough, the financial innovation that helped to get us into this mess in the first place is going to make it harder for some companies to get out.

The slicing and dicing of debt, which has clogged up the financial system, has left many companies with a terrible tangle of lenders.

In the old days, most companies had one main bank to deal with when they got into trouble. Woolies has eight, including GMAC, which is close to bust itself, and Bank of Ireland, which is being bailed out by the Irish Government. Companies owned by private equity firms often have countless tranches of debt owned by hundreds of hedge funds, all with different agendas.

A nightmare for the companies. A dream for the lawyers.

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