Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Judge Approves Altegrity Inc. Bankruptcy Plan

Author: Joel R. Glucksman

Date: October 2, 2015

Key Contacts

Back

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.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Corporate Consolidation and Antitrust Issues in Mergers post image

Corporate Consolidation and Antitrust Issues in Mergers

Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]

Author: Dan Brecher

Link to post with title - "Corporate Consolidation and Antitrust Issues in Mergers"
What is Business Law and Why Is it Important? post image

What is Business Law and Why Is it Important?

Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]

Author: Dan Brecher

Link to post with title - "What is Business Law and Why Is it Important?"
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"
How to Conduct a Fair and Legal Employee Termination in 2025 post image

How to Conduct a Fair and Legal Employee Termination in 2025

Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]

Author: Angela A. Turiano

Link to post with title - "How to Conduct a Fair and Legal Employee Termination in 2025"
Admin Dissolution for Annual Report: What You Need to Know post image

Admin Dissolution for Annual Report: What You Need to Know

While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]

Author: Dan Brecher

Link to post with title - "Admin Dissolution for Annual Report: What You Need to Know"
What Is Antitrust Litigation Law? post image

What Is Antitrust Litigation Law?

Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]

Author: Robert E. Levy

Link to post with title - "What Is Antitrust Litigation Law?"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

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!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!