During my time at one company, there was a saying about this type of situation “the large sucking sound”. It was used to refer to a client account that wasn’t going right (to either the expectations of the company's management or the client). It meant that the client was making noise and “sucking” up additional resources, making the account spend more money than the client was being billed. In some extreme cases, this was necessary to turn a bad situation around and truly create a win/win for everyone. In others, nothing could turn the account and eventually attorneys were involved (which is never a good situation).
We knew, and I assume senior management knew, which accounts were destined for legal action, but no one stood up to stop the situation. I’m telling you now, if you feel you are in a bad situation, it probably is a bad situation. Don’t let ego get in the way of a good business decision. It’s better to recognize it early and deal with it, than to waste time, money and resources to save a sinking ship.