Kroll Ontrack in Chapter 11 Bankruptcy Protection
Minneapolis-headquartered e-discovery software supplier Kroll Ontrack has filed for Chapter 11 bankruptcy protection alongside its parent company Altegrity in the US Bankruptcy Court for the District of Delaware, however it’s business as usual in the UK, Kroll Ontrack has told the Legal IT Insider.
Kroll Ontrack’s Chapter 11 status, which it entered on 8 February, will allow it four months to restructure and reduce its debt and reorganise its affairs, during which time it does not have to make any payments to creditors. The Chapter 11 period will end on 8 June unless it applies to the court for an extension.
Included in the Chapter 11 filing are Kroll Inc.; Kroll Cyber Security; Kroll Recovery; and Kroll International. Kroll Ontrack’s UK business is not part of the financial restructuring process in the United States.
A press release from Altegrity said in February that after weeks of constructive discussions with secured lenders, the company had finalised the terms of a restructuring support agreement with holders of more than $1.3bn of secured debt.
Jeffrey Campbell, Altegrity’s president and chief financial officer said: “After the unanticipated decision by the U.S. Government in September 2014 to end two substantial contracts of the USIS [US Investigations Services] business, the company reevaluated its capital structure and determined that a comprehensive financial restructuring is in the best interests of all stakeholders.”
Sales of the company’s Factual Data business, which provides mortgage and verification services, and the Global Security and Solutions division of USIS is expected to reduce debt by around $700m.
Kroll Ontrack, which has and will continue to conduct business as usual throughout the financial restructuring process, has over 30 offices in 19 countries across the world and works with many of the top 200 law firms in the UK.
Speaking to the Legal IT Insider, communications and marketing director Tracey Stretton said: “Kroll Ontrack is a healthy business and we continue to conduct business as usual. Over the last six months, business in the UK and Europe has been strong and we have been investing in new people.”
Managing legal consultant, EMEA, Robert Jones added: “In March we opened our fifth international data centre in Paris, which services a very clear need from clients not just in France but across Europe. This comes on the heels of a German data centre opened in June last year. We see an upward trend in business and in those centres.
“In October last year we opened a document review and managed services business with seats for 55 contract attorneys in London, which has taken off very quickly and in the next couple of weeks we are building additional accommodation to grow to 86 seats.”
Debevoise & Plimpton is advising Kroll Ontrack on the restructuring in the US, while Paul, Weiss, Rifkind, Wharton & Garrison and Kirkland & Ellis are advising the debtholders.