This process doesn't have to be the result of any nefarious intent. AIUI, it's common when taking on debt for the creditors to try to protect their investment

This process doesn't have to be the result of any nefarious intent. AIUI, it's common when taking on debt for the creditors to try to protect their investment by including specific performance guarantees. There may be numbers that the company has to maintain around revenue, inventory turnover, etc. - or the creditors will have the right to call the debt. The thing is, the need for the creditors to limit their risk isn't necessarily aligned with the overall best interest of the company. Conforming to these debt covenants can force the borrower to act for short-term numbers at the expense of long-term performance, a sort of Goodhart's Law effect caused by the metrics imposed in the debt covenants. I've seen my employer become the beneficiary of this through a couple of periods of tough markets. Privately held with zero debt, our CEO was able to solidify our market position at the same time our competitors were doing obviously dumb things, the result of which is that we came out of those difficult times very much stronger in the industry.