It's really all about debt. A company can be riding high and have a $4 MIL loan that they stop making payments on. The bank files for collection and the company seeks chapter 11 protection.
From what I know about WT they don't really borrow money. They tend to operate in cash. In my mind the recent cutbacks are a result of a sudden, unexpected drop in cash position. Or an utter failure in internal reporting of cash on hand.