The credit crisis entered a new and more ominous phase last week, as prestigious companies began to fall prey to the pressures of the market.

Carlyle Capital Corp. announced on Sunday that its shareholders have voted in favor of a compulsory winding up, joining Bear Stearns (NYSE: BSC) among the most conspicuous credit-crisis casualties of the past week.

What happened?
Carlyle Capital Corp., an affiliate of one of the world's largest private equity firms, The Carlyle Group, was unable to come to an arrangement with lenders last week. Lenders then took possession of the fund's assets. The Carlyle Group, based in Washington, D.C., has around $75 billion under management, including doughnut seller Dunkin' Brands and TV ratings agency Nielsen. Although Carlyle executives own 15% of the defunct fund, they said the fund's woes will not have a measurable impact on any of the company's other funds.

Although the fund had primarily invested in mortgages guaranteed by Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE), it leveraged itself to positively obscene proportions. Get this: Carlyle Capital Corp raised only $670 million in client money, but used that money to borrow enough to acquire a $21.7 billion bond portfolio. In fact, the fund was leveraged about 32 times.

As the value of mortgage-backed securities used as collateral for loans decreased in this market, lenders got nervous and demanded Carlyle put up more money to compensate for the falling values. When Carlyle failed to meet the margin requirements, lenders led by Deutsche Bank AG (NYSE: DB) and JPMorgan Chase (NYSE: JPM) began to sell the fund's assets.

What now?
No one knows when this spate of bailouts and defaults will end. Rumors are flooding Wall Street regarding which firms might be next. The rumor mill is a slippery slope. Rumors can be self-fulfilling prophesies as a firm's clients get nervous and begin to pull their money out of the firm, thereby making the rumor a reality.

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Fool contributor Tom Hutchinson holds no financial position in any companies mentioned. The Motley Fool has a disclosure policy.