A group of BearingPoint Inc. bondholders won a court decision last week and are moving forward to collect $21.5 million damages from the consulting firm. The bond default ruling came after several hedge fund managers complained that BearingPoint, a spinoff of KPMG's former consulting business, had failed to file up-to-date financial statements. Creditors and hedge funds commonly use the violation of the bond-agreement basic to extract settlement concessions. BearingPoint first disclosed its accounting issues in November 2004, when the company said that some of its invoices had been counted twice. Former Oracle Corp. chief financial officer Harry You took over the company in March 2005 and has said that the company spent millions to prepare its 2004 financial results and review the statements of the previous three years. In February, the firm reported a $546.2 million loss for 2004 and admitted that it still faces other liability issues -- some of which stem from its split from KPMG LLP. BearingPoint has appealed the court ruling and asked other creditors to grant waivers to avoid similar suits. The company said that it would delay filing its annual report because of the uncertainty that the court ruling has produced. You said that BearingPoint’s revenues for 2005 were $2.4 billion, a 2 percent increase over 2004. The company expects to report a loss of $650 million to $720 million for 2005, at least $100 million more than it lost in 2004.
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