- The Washington Times - Thursday, February 19, 2009

ASSOCIATED PRESS

Technology consultant BearingPoint Inc. filed for bankruptcy Wednesday, saying it had negotiated a “prearranged” bankruptcy plan with lenders that could help reduce its debt load.

The McLean company filed for Chapter 11 in U.S. Bankruptcy Court in the Southern District of New York, with $2.23 billion in total debt and $1.76 billion in total assets as of Sept. 30. The filing only includes the company’s U.S. operations.

The company has faced heavy debt in part because of the purchase of numerous consulting companies between 1999 and 2002. It also was the subject of a probe by the Securities and Exchange Commission in 2005 regarding accounting issues.

Chief Executive Officer Ed Harbach said operations would continue as the company worked on its restructuring. It has filed a “prearranged” plan with the court, the company said.

The plan calls for cancellation of all existing shares, and unsecured lenders will be given common stock. A $500 million credit facility would be replaced with a $272 million term loan that carries accrued interest and a $130 million synthetic letter of credit facility. The company said it was open to changing the plan if creditors’ recovery could be increased.

BearingPoint hired Weil, Gotshal & Manges LLP as bankruptcy attorneys and AlixPartners LLP and Greenhill & Co. as financial advisers.

BearingPoint was spun off of consulting firm KPMG LLC in 1999. The majority of its revenue - about 40 percent - comes from federal contracts. According to its most recent quarterly report, customers included the State Department, the U.S. Air Force and U.S. Marine Corps. Other clients include Time Warner Cable Inc. and Unifi Mutual Holding Co.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide