US companies face a greater risk of liquidation because sources of finance that would allow them to reorganise under the US bankruptcy code are drying up in the financial crisis, S&P has warned. In the US, companies on the verge of insolvency can restructure themselves under a Chapter 11 bankruptcy protection process, sometimes taking years. But the credit crunch has severely limited the availability of so-called ‘debtor in possession’ financing that is vital to give them this second chance. With previous big providers of DIP financing, such as GE Capital, shying away from the market, companies may have to rely on their existing lenders, the rating agency said.