
Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Author: Joel R. Glucksman
Date: July 24, 2015
Partner
201-896-7095 jglucksman@sh-law.comOnce the seventh-largest executive search firm in the U.S., CTPartners recently reported that it will suspend operations by June 30.
CTPartners recently disclosed that its $61 million asset sale to rival firm DHR International will not be enough to prevent the company from seeking bankruptcy protection. In the announcement, the company stated that its cash resources are depleted to the point where it will run out of money by the end of the month, barring an 11th-hour quick sale. However, the sale of the company will be difficult as DHR has only agreed to buy certain assets from CTPartners, including 250 employees at 17 offices in Europe and Dubai.
The bankruptcy filing was significant because the company had begun expansion plans with takeover bids for overseas competitors in December. However, when sexual discrimination scandals emerged in May, the company’s stock price plummeted by 33 percent. Compounded by a drop in earnings forecasts, shareholders sued the company and its top executives, asserting claims that the company withheld information about the scandals to inflate stock prices.
With its stock price eventually dropping from $24 to somewhere between $7-$8 per share, one of the firm’s majority stakeholders, Maguire Asset Management, pressured the company to find a buyer. Tim McGuire, the managing partner, claimed in The Deal that the company knew something was wrong when DHR reduced its ownership stake in CTPartners to only four percent.
“The management and board made a lot of mistakes,” McGuire commented. “I was lucky enough to sell my position. [CTPartners] dropped the ball.”
Following more than a dozen sexual discrimination claims, the company was forced to negotiate an equity sale for more than $12 million. Shortly thereafter, CTPartners obtained $12.5 million in debt financing comprised of a second-lien note purchase agreement because it had violated its covenant, leaving the company no choice but to sell. Noted Scott Scanlon, CEO of Hunt Scanlon Media LLC, the company’s descent escalated as 65 recruiters worth more than $75 million in billings left the firm.
Due to the fact that CTPartners depends largely on human capital, the defection of consultants and recruiters forced the company into a quick decision on its future.
As CTPartners contemplates its future, its reputation and financial standing remain irreparably damaged. With the asset sale, DHR significantly expands its international presence with an additional $75 million in top line assets, and now intends to expand to 70 offices worldwide, boasting a workforce of more than 1,000 personnel.
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.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
Author: Dan Brecher
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Author: Bryce S. Robins
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
Author: Matthew F. Mimnaugh
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!