Two weeks after announcing that it was running out of cash, managed infrastructure provider and private-label ASP Interliant, Inc. on Monday announced that it and all of its U.S. subsidiaries had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Interliant’s U.K. subsidiaries are not included in the filing and will continue to operate normally.
Interliant also announced earlier this week that it has entered into an agreement with its primary secured lender, Silicon Valley Bank, granting it consensual use of its cash collateral, which the company said will provide it adequate funding to allow it to maintain operations until Debtor-in-Possession (DIP) financing is obtained.
Interliant said in a statement that it is in the process of securing DIP financing to supplement its cash flow during the Chapter 11 proceedings. The company said the timing of a closing is still uncertain, but the expected financing, which is subject to bankruptcy court approval, will provide a source of funds that will allow the company to operate its business normally while it focuses on its current business plan.
The company’s Web site offered messages to both its customers and vendors. Interliant promised customers to continue to offer uninterupted service and its message to vendors emphasized its inability to pay for previous goods and services under Chapter 11 bankruptcy law.
While Interliant can re-emerge from its bankruptcy filing, the resignation of President and CEO Bruce Graham and Steve Munroe, its chief operating officer, doesn’t bode well for the ASP veteran. Last spring, then-new CEO Graham sold off the enterprise resource planning (ERP), customer relationship management (CRM) and retail-hosting businesses. The streamlining moves were lauded by industry watchers. One analyst labeled Interliant the comeback kid.
Graham will remain a member of Interliant’s board of directors. Francis J. Alfano, Interliant’s chief financial officer, has assumed the positions of CEO and president, and has also been appointed as a director of the company.
“Chapter 11 enables us to continue the progress we have made in restructuring the business, continuing to deliver top-quality service to our customers, create value for our creditors, and continue our role in the IT infrastructure market,” said Alfano. “We believe this period of reorganization will help us regain our financial stability and we hope to emerge from Chapter 11 as quickly as possible, with our ability to deliver industry-leading managed IT infrastructure services intact.”
The company also announced that Thomas Dircks and Merril Halpern of Charterhouse Group International, and Charlie Feld of The Feld Group, resigned from its board of directors as of August 1, 2002. Charterhouse Group International and The Feld Group will continue to be represented on the company’s board, each through a single board seat.
Interliant is currently listed by ASPnews as a Top 30 Enabler. The next edition of the monthly listed will be published on Tuesday, August 13.
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