marchFIRST Sells Assets to Divine, Epic Software
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A week after Internet consulting firm marchFIRST Inc. filed for Chapter 11 bankruptcy protection, the Chicago-based company is quickly moving to resolve its obligations and announced today its intent to sell its HostOne ASP business to Divine Inc. and the assets of its New York, New Jersey and Boston offices to Epic Software & Services Inc.
Both of these agreements are subject to approval from the bankruptcy court, however.
The bankruptcy filing listed assets and debts of greater than $100 million each, according to court papers, with creditors numbering over 1,000.
Indications of the sale to divine were first reported March 30, two days after NASDAQ halted trading of the company's stock.
marchFIRST said divine has agreed to cover certain operating shortfalls of the Houston business and to assume certain liabilities of the business. Financial specifics were not disclosed.
Epic would pay marchFIRST some cash at closing, assume certain liabilities and future cash payments based on collection of accounts receivable and revenue generated over the next five years.
marchFIRST said that it "continues to be in active discussions for the sale of other domestic and foreign business units."
But the news is not good for holders of the company's common stock. marchFIRST said any cash proceeds received from these transactions or others are to be distributed to creditors and, if creditors have been fully paid, to holders of marchFIRST's preferred stock and then holders of its common stock.
"However, as previously indicated, at this time it is unlikely that any proceeds will remain for distribution to holders of marchFIRST's common stock," the company said.
Formed by the merger of Whittman-Hart and USWeb/CKS in 1999, marchFIRST had been downsizing its workforce: early this year, 550; and last year a total 2,100 people were let go.