Consulting conglomerate BearingPoint Inc., which began as the consulting arm of Big Four firm KPMG but has been best by a series of financial problems and large earnings losses over the past several years, has filed for Chapter 11 bankruptcy and sealed an agreement with lenders to slash its debt.
According to court documents, BearingPoint listed assets of $1.76 billion and debt of $2.23 billion.
In 2004, the company revealed accounting problems when it admitted that many of its invoices were recorded twice. The accounting issues forced the resignation of then-chairman Rand Blazer.
As part of the pre-arranged plan with creditors, a $500 million senior secured credit facility will be replaced, new preferred stock will be issued, unsecured debt will be exchanged for different classes of common stock and all existing shares will be canceled.
BearingPoint said that its current management and board members will remain. The company employs roughly 15,000 people.
