Joel R. Glucksman
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Judge Approves Altegrity Inc. Bankruptcy Plan
Author: Joel R. Glucksman
Date: October 2, 2015
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On Aug. 14, a bankruptcy judge approved a restructuring plan for Altegrity Inc., one of the largest global risk consulting and information services companies. The approved plan comes after the company, which had filed for bankruptcy protection on Feb. 8, had its previous restructuring plan rejected.
Debt of Altegrity accumulates
The firm gained notoriety after its subsidiary vetted former National Security Agency contractor Edward Snowden, but quickly accrued massive debt due to the loss of several lucrative contracts. According to court documents, the subsidiary lost several federal government contracts, which accounted for 39 percent of Altegrity’s total net revenue. Further, Altegrity officials cited the cyberattack that hit USIS, which exposed personnel documents for Department of Homeland Security personnel, as one of the main reasons for the firm’s lost contracts.
Also compounding the company’s financial liabilities was the fact that executive bonuses were handed out as part of agreements made in 2013 and 2014. These bonuses were given out as the company began to reduce costs and downsize its workforce.
The new restructuring plan
According to bankruptcy filings, there were several complications in the case that forced Altegrity to agree to a compromise reorganization plan. Following the judge’s approval, Altegrity’s top-ranking debt was reinstated in the reorganization plan. As part of the revised agreement, second lien debt holders of $519 million worth of second lien debt will receive 96.1 percent equity in the restructured Altegrity, thereby recovering 48 percent of their debt total. The remaining equity will be divided amongst other bondholders. However, the unsecured creditors for USIS intend to seek lawsuit recoveries, while unsecured creditors for Altegrity and its two other subsidiaries, Kroll and HireRight, will divide $1.25 million among them under the new plan.
The new bankruptcy plan also calls for USIS to wrap up its affairs by offering suppliers and unsecured creditors a split of the proceeds from lawsuits.
Further, the restructuring plan will provide creditors with the opportunity to pursue lawsuits against USIS executives.
The future of Altegrity
The company intends to re-emerge from bankruptcy with an influx of capital to maintain operations. Currently, Altegrity, Kroll and HireRight are owned by Providence Equity Partners, but that is subject to change when creditors are handed a majority share of the restructured company following the implementation of the bankruptcy plan.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
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Judge Approves Altegrity Inc. Bankruptcy Plan
Author: Joel R. Glucksman
On Aug. 14, a bankruptcy judge approved a restructuring plan for Altegrity Inc., one of the largest global risk consulting and information services companies. The approved plan comes after the company, which had filed for bankruptcy protection on Feb. 8, had its previous restructuring plan rejected.
Debt of Altegrity accumulates
The firm gained notoriety after its subsidiary vetted former National Security Agency contractor Edward Snowden, but quickly accrued massive debt due to the loss of several lucrative contracts. According to court documents, the subsidiary lost several federal government contracts, which accounted for 39 percent of Altegrity’s total net revenue. Further, Altegrity officials cited the cyberattack that hit USIS, which exposed personnel documents for Department of Homeland Security personnel, as one of the main reasons for the firm’s lost contracts.
Also compounding the company’s financial liabilities was the fact that executive bonuses were handed out as part of agreements made in 2013 and 2014. These bonuses were given out as the company began to reduce costs and downsize its workforce.
The new restructuring plan
According to bankruptcy filings, there were several complications in the case that forced Altegrity to agree to a compromise reorganization plan. Following the judge’s approval, Altegrity’s top-ranking debt was reinstated in the reorganization plan. As part of the revised agreement, second lien debt holders of $519 million worth of second lien debt will receive 96.1 percent equity in the restructured Altegrity, thereby recovering 48 percent of their debt total. The remaining equity will be divided amongst other bondholders. However, the unsecured creditors for USIS intend to seek lawsuit recoveries, while unsecured creditors for Altegrity and its two other subsidiaries, Kroll and HireRight, will divide $1.25 million among them under the new plan.
The new bankruptcy plan also calls for USIS to wrap up its affairs by offering suppliers and unsecured creditors a split of the proceeds from lawsuits.
Further, the restructuring plan will provide creditors with the opportunity to pursue lawsuits against USIS executives.
The future of Altegrity
The company intends to re-emerge from bankruptcy with an influx of capital to maintain operations. Currently, Altegrity, Kroll and HireRight are owned by Providence Equity Partners, but that is subject to change when creditors are handed a majority share of the restructured company following the implementation of the bankruptcy plan.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.