How Companies Can Lose Tens of Millions Without Being “Cash Constrained”

Langborne Collection Hotels appeared to be a corporate treasury success story.

With 340 luxury properties across 52 countries and roughly $680 million in cash on the balance sheet in early 2024, liquidity was not a constraint. The group had never breached a covenant, never struggled to roll over debt on its portfolio, and rarely needed to justify its cash position during seasonal slowdowns.

And yet, over the following 18 months, the company quietly destroyed millions of dollars in value. Not through a crisis, but because it lacked effective management and visibility of its cash holdings.

The Langborne company described here is a hypothetical example drawn from the real-world situations we’ve seen across hospitality, industrials, retail, and services businesses. Langborne may be a fictional hotel group, but the mechanics and the costs to the business are not.

Plenty Of Cash, Not Enough Certainty

The first loss came through an acquisition Langborne never made.

Early in the year, a distressed portfolio of eight Iberian hotels was put up for sale. The seller, under pressure from lenders, required bidders to provide proof of funds within 48 hours – miss the window and you were out.

Langborne had more than enough money; around €220 million sat in European bank accounts, well above the purchase price. But when the treasury team was asked how much of that cash could actually be deployed (immediately and without unintended consequences) the answers were slower than the seller wanted.

Which balances were operational? Which were pledged? Which sat in restricted jurisdictions where upstreaming would trigger withholding tax leakage or transfer pricing scrutiny? How much of that liquidity was functionally ‘trapped’ due to a lack of formal Intercompany Loan Agreements or local capital controls?

By the time the numbers were reconciled across entities and banks, the auction had closed. The board estimated that losing this opportunity cost Langborne around $15–18 million in potential profit .

There’s a critical difference between confirming that €220 million exists and being able to commit it within a 48-hour window. The first is accounting; the second is operational readiness.

The fix: Modern treasury technology would have changed the outcome; replacing manual portal-hopping with API-driven bank connectivity and ISO 20022 data standardisation. These tools aggregate disparate global data into a single source of truth in real-time.

Machine learning models classify balances by availability, identify pledged amounts, flag regulatory constraints, and project working capital requirements in real time. What took Langborne’s team three days of manual work – pulling data from disparate systems, validating across time zones, reconciling entity-level restrictions – can now be automated and completed within minutes or hours.

The Activist Problem

The most visible cost came later, when an activist investor argued Langborn was “hoarding $650 million in excess cash” and demanded a rapid buyback.

The treasury team knew the headline number was misleading. Once operational needs, legal restrictions, letters of credit, and tax friction were stripped out, only about $220 million was genuinely surplus.

Producing a validated, auditable breakdown required pulling data from multiple systems and regions. While the company prepared its response, the activist narrative gained traction. Then analysts picked it up. The board approved a $150 million buyback, earlier and larger than management had planned.

The company could afford it, but it happened on someone else’s timeline.

Similar dynamics play out in consumer goods companies facing short sellers, or in tech firms where analysts scrutinise “net cash” claims against observed borrowing. When management can’t explain the movie behind the snapshot, credibility erodes.

The fix: High-quality cash visibility enables treasury to produce an immediate, defensible view of deployable versus constrained cash – supported by independent bank confirmations and automated reconciliation.

That clarity reframes capital discussions around facts rather than narratives. By identifying and deploying ‘lazy’ cash, treasury directly optimises the balance sheet, improving Return on Invested Capital (ROIC) and lowering the Weighted Average Cost of Capital (WACC).

When treasury teams can prove that ‘excess’ cash is actually earmarked for high-yield strategic initiatives or necessary liquidity buffers, it transforms from a cost center into a protector of shareholder value.

While Langborne’s experience played out in hotels, the underlying failure – confusing cash presence with ineffective cash control – shows up even more starkly in capital-intensive sectors. Here’s a real world example.

Aerospace: Profitable Programs, Negative Control

The aerospace manufacturer had strong demand, long-term contracts, and a healthy backlog. Its order pipeline extended nearly a decade, margins looked robust, and lenders were comfortable underwriting Original Equipment Manufacturer (OEM) commitments. At the corporate level, liquidity appeared ample and covenants were met.

What it lacked was program-level cash visibility.

Several flagship programs required significant upfront tooling, supplier deposits, and long qualification cycles before the first milestone payment. Engineering delays of weeks regularly pushed certification into the next quarter, postponing inflows while expenses continued. Meanwhile, OEM customers stretched payment terms from 60 to 95 days, and tier-two suppliers increasingly demanded advance payments.

None of this caused an immediate funding crisis, but it steadily drained value.

Over 18 months, the company tapped more than $260 million of its revolver – not because it was unprofitable, but because cash flowed out long before it returned. Higher rates turned that timing gap into tens of millions in interest expense. Consolidated forecasts masked which programs were cash-negative and which were self-financing.

When supply-chain disruption arrived, the company cut cap-ex, delayed supplier commitments, and renegotiated schedules. Those moves protected liquidity but incurred penalties, strained OEM relationships, and pushed milestone receipts further out. The issue was no longer timing; it was credibility.

The fix: Not more financing, but better visibility. By moving to program-level cash forecasting, stress-testing delivery and certification scenarios, and explicitly linking cap-ex approvals to true cash availability, rather than accounting margin, the company could reduce revolver usage materially within four quarters.

Just as importantly, it would regain credibility with lenders and suppliers by demonstrating control over its cash trajectory.

Cash Visibility Isn’t Just Insurance, It’s Infrastructure

Insurance is a response to uncertainty – something you buy to feel safer. Infrastructure is a deliberate investment that changes what you can do.

Treasury teams don’t need more reports, they need fewer surprises and more certainty. To put it another way, if your cash position needs a spreadsheet, a coffee, and a prayer… It’s not a cash position. With true cash visibility, your treasury team doesn’t just survive volatility; it shapes outcomes.

It turns cash into a real-time decision mechanism, giving the company the ability to move faster than competitors, defend against activist narratives, and seize opportunities the moment they appear. In that sense, cash visibility is not a risk control measure, it is part of the operating system.