how do you define financial distress 
financial distress is a condition wherein an individual or company isn t able to cover their financial obligations this means the entity is not generating enough revenue or income to pay its debts this condition can be the result of a drop in income changes in the economy higher costs bad budgeting and or overspending the bottom linecompany shareholders generally have to approve of any major changes to the business this includes any mergers or acquisitions that may occur financially distressed companies may seek out buyers to save themselves from going under in certain cases they may put in a whitewash resolution which promises the acquirer financing as long as it ensures the target will remain viable enough to pay off its debt before being acquired 