Vernon Jayanathan. Image Credit: Maritime Recruitment Company Limited

In the volatile world of bunker trading, company failures are not rare. High leverage, thinning margins, oil-price swings, credit squeezes, and management missteps can, and have, sunk even the most established of players.

When a bunker company collapses, there is an immediate supply of traders seeking new horizons.

For firms looking to recruit, this presents a classic dilemma: is the trader a good asset, experienced, battle-tested, and available without paying the premium it would take to prise them from a rival; or a liability carrying reputational risk, potential legal exposure, and emotional and cultural baggage?

The Case For

The "good asset" case rests on several practical advantages. Traders who have survived a company failure typically possess an unusually deep and wide insight into the market. They understand counterparty credit, physical logistics, vessel operations, and the nuances of bunker delivery in key ports.

Many have managed complex positions under extreme pressure: scrambling to cover short positions, renegotiating with suppliers, or navigating sudden liquidity freezes. This experience is hard to replicate in a stable environment.

When talent is scarce, such individuals can be hired more quickly and often, dare I say it, more economically than traders flourishing at still-thriving houses. For a firm looking to expand quickly or fill a gap left by attrition, the case can look attractive.

This is, after all, a relationship business, and if your company is in a solid financial position with good credit and the appropriate appetite for risk, there is every chance that their clients will follow. What is more, non-competes and garden leave often fall away in practice when a firm collapses, and this makes securing such a trader an even more attractive proposition.

Moreover, it is important to note that not every failure is the result of individual action. Macroeconomic shocks, such as sharp drops in fuel demand, sudden spikes in crude prices, or political turmoil, can overwhelm otherwise competent operations. A trader who performed well in the middle of all this may simply have been unlucky in where they worked. In those cases, the hire can bring institutional knowledge without the toxic history.

Some of the strongest traders in this market have at some point been associated with a failed or restructured firm, and the market often separates individual capability from corporate outcome.

Since I joined the industry in 2009, many firms have disappeared. OW Bunker, Brightoil, GP Global, Cockett, and Aegean are just a few. If you look around the industry, many from these firms have gone on to great things. 

The Case Against

The liability side is equally real and frequently under-appreciated. The first risk is damage to your own reputation by association, something I wrote about in a previous article.

Counterparties, banks, and even internal members of staff may view the new hire with suspicion. Questions arise: did this trader contribute to the failure through aggressive risk-taking, or unethical or unprofessional behaviour?

Even if the answer is no, the association can complicate credit lines, joint ventures, or customer relationships. In bunkering, where trust and payment terms are critical, a clouded background can affect the cost of doing business.

Second is the risk of cultural or behavioural carry-over. Traders from distressed environments sometimes develop habits suited to survival mode: short-termism, aggressive negotiation that borders on adversarial, or a higher tolerance for opacity. Integrating such an individual into a more process-driven, risk-controlled, collaborative culture requires deliberate management. Without strong oversight, the hire can introduce friction or, worse, recreate the conditions that contributed to the previous firm's demise.

The legal and compliance exposure must also be considered. Depending on the nature of the failure, there may be ongoing investigations, creditor claims, or regulatory scrutiny. A trader who was key to many of their old firm's transactions could become a witness, or even a defendant. While employment itself does not automatically transfer liability, the association can still create unwanted distraction.

It is important to understand that the reason for a firm's failure does have an impact on how easily, or otherwise, its employees can find other work. A firm that ran out of money is one thing, a firm designated by OFAC or caught in a sanctions case is another, and a trader from the second carries a heavier problem for the hirer's own compliance. It is important that due diligence, reviewing trading records where possible, speaking with former colleagues and counterparties, and checking for outstanding litigation, is carried out thoroughly.

But who does one check with? Many people just approach the references that are offered. In instances like this, I suggest contacting credit desks and counterparties. One should also look at administrators' reports, court and arbitration records, and sanctions lists.

A Risk-Adjusted Hire

A balanced approach would be to treat the decision as a risk-adjusted investment rather than a binary choice. The most successful hires from failed firms tend to share common traits: clear evidence that the individual was not the primary driver of the collapse, a demonstrated ability to operate within robust controls, and a willingness to discuss the failure transparently.

Firms that hire well in these situations usually pair the trader with strong risk oversight, clear performance metrics, and a well-thought-out onboarding process that addresses cultural integration.

If you are thinking of recruiting from a failed or failing firm then more than anything I would advice you to trust your instincts. If you feel that something is not right, do not ignore it. If you need help, talk to a recruitment professional to help as we often have insights on a candidate that others do not.

In short, a trader from a failed bunker company can be a genuine coup when their individual competence is solid and the failure was largely external or structural. The same hire becomes a liability when the individual's role in the collapse is ambiguous, when reputational damage is severe, or when the hiring firm lacks the systems to manage residual risk.

The difference lies less in what is on a CV and more in the quality of diligence, the strength of the receiving culture, and the onboarding processes in place for the new arrival.

In a market as relationship- and credit-driven as bunkering, those factors often determine the success or failure of such a hire.

Advice for the Trader

If you are a trader caught up in a situation where your firm has gone down for various reasons and are looking to get back into the market, my advice would be to take a wider view and try to ascertain how the situation is viewed from afar. Then, during job approaches and interviews, reinforce your own abilities, focusing on what you yourself bring to the table.

Demonstrate your integrity in every interaction you have and create as much distance as possible between you and whoever has fallen short. My suggestion also is not to gossip. If people try to draw you into uncomfortable or unsavoury conversations, just say you want to focus on your work. Also seek support from industry contacts and make it clear that as far as you are concerned, it is business as usual.

If you need my help, feel free to contact me.