The BBC has reported that:

Carlyle Capital Corporation (CCC), a unit of the private equity firm Carlyle Group, has said it will not be able to meet lenders' demands for money. The US mortgage-backed bond fund will collapse if, as expected, its lenders seize its remaining assets. CCC's problems are the latest sign of the credit market turmoil that has prompted billions of dollars of losses at some of the world's biggest banks.

As Business Banking Review puts it:

Investment management firm Carlyle Capital has announced that, although it has been working diligently with its lenders, the company has not been able to reach a mutually beneficial agreement to stabilize its financing.

The company expects that its lenders will promptly take possession of substantially all of the company's remaining assets. The only assets held by the company are US government agency AAA-rated residential mortgage-backed securities (RMBS). During the last seven business days, the company received margin calls in excess of $400 million. As the company was unable to pay these margin calls, its lenders proceeded to foreclose on the RMBS collateral.

In total, through March 12, 2008, the company has defaulted on approximately $16.6 billion of its indebtedness. The remaining indebtedness is expected to go into default.

But what's really telling is that Guernsey based and Dutch listed Carlyle had a year end of 31st December and its accounts were signed off as showing a true and fair view on 27 February 2008. That's 15 days ago. The auditors were:

PricewaterhouseCoopers CI LLP
National Westminster House
Le Truchot
St. Peter Port,
Guernsey GY1 4ND
Channel Islands

The audit opinion? Unqualified.

Those accounts include this statement (page 5):

Going Concern
The directors are satisfied that the Group has adequate resources to continue to operate as a going concern for the foreseeable future and have prepared the audited consolidated financial statements on that basis.

Has there ever been a shorter period between such a statement being issued and insolvency occurring?

What does this say about the quality of the work undertaken by PWC in the Channel Islands?

When this can happen can we rely upon anything PWC does?

What we do now know is that their offshore world is collapsing. I just hope that the collateral damage for the rest of us is not too big.