BearingPoint files for Chapter 11 restructuring
Company officials said the move has allowed them to reach a financial restructuring agreement with senior secured lenders that will significantly reduce the company’s debt and improve its capital structure.
BearingPoint Inc. announced today that it has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York.
In a statement, company officials said the move has allowed them to reach a financial restructuring agreement with senior secured lenders that will significantly reduce the company’s debt and improve its capital structure.
Company operations based outside the United States are not included in the filing and will not be affected, they added.
BearingPoint officials said they plan to maintain normal operations throughout the financial restructuring process and will continue providing uninterrupted service to their clients worldwide.
“Our day-to-day operations will continue uninterrupted, and we want to assure our employees and customers that we remain committed to serving our clients and to providing world-class consulting solutions,” said Ed Harbach, BearingPoint’s chief executive officer, in a statement.
“We’ve made significant progress in the last year to improve our underlying business fundamentals,” he said. “We’ve delivered increases in gross profit and operating income and substantially lowered our overhead expenses. This restructuring process will significantly improve our financial profile and further enhance our ability to compete in the marketplace.”
Harbach said the restructuring was an important step to secure a better and stronger future for BearingPoint, “and we expect to emerge from this process in an expeditious manner.”
BearingPoint said the decision to file for Chapter 11 protection was made after an exhaustive review of its options. In addition to significantly reducing its debt burden, the process resolves the company’s near-term cash payment obligations and the prospect that the company would have to repay all its outstanding debt if its common stock was delisted from the New York Stock Exchange.
BearingPoint, of McLean, Va., ranks No. 28 on Washington Technology’s 2008 Top 100 list of the largest federal government prime contractors.
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