PETITION

We wrote about this bankruptcy filing on August 11. We noted the highly competitive landscape confronting outsourced payroll, benefits and human resources services companies. Because the bankruptcy filing wasn’t complete at the time of publication, however, we didn’t have the opportunity to add that the company descended into bankruptcy primarily because its sole owner (fraudulently?) mismanaged the company and misappropriated approximately $90mm. Uh oh.

The result? A free fall into bankruptcy one month after an independent director took over management of the business, a CRO came on board (Huron) and an expedited sale process commenced. This world being the savage world it is, competitors started picking off company clients and so the value of this company appears to be dissipating before our eyes with each passing day. The company has a $7.8mm DIP commitment in place from pre-petition lender, KeyBank NA.

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