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In 1993, after a decade of excellent performance in sales growth, profitability and an aggressive acquisitions campaign, Filippo Fochi Spa incurred severe financial distress. It was declared bankrupt in the subsequent year by the Court of Bologna. The case presents the description of the industrial strategy carried on by Filippo Fochi Spa in the civil works and plant construction industries in the 1989-1993 period and the financial strategy of the firm chosen to finance the acquisition of a large number of other firms. The case focuses on the relationship between operating leverage, profitability and capital structure choices and tries to demonstrate that a good vertical integration strategy can be torn apart by bad financial management of the firm. The case can be used in strategic finance or in corporate finance executive or MBA courses.