Don?t be Surprised by Bankruptcy! There are numerous scenarios that might be labeled as precursors to potential bankruptcy filings, with some being more overt than others. However, there is one circumstance that appears to go against logic: What is the Cloaking Effect? Some companies pay their trade credit obligations in a discount or prompt manner right up to the actual filing/closing date The company was able to maintain a Payment Score around 8, which indicates no evidence of severely delinquent payment behavior. In contrast the FRISKÆ score dropped significantly early in 2011, an indication of the company’s degraded financial position. Credit risk management therefore is especially important in the consumer goods industry that is largely dependent on retail industry.