BearingPoint: Power to bondholders

Author: | Published: 1 Dec 2006

BearingPoint recently reached an agreement in principle with most of its debenture holders to waive until October 2008 certain covenants relating to the company's SEC reporting requirements and rescind any acceleration related to its failure to file.

BearingPoint can now draw a line under a surprise decision in New York state trial court finding that it had breached its indenture reporting obligations when it failed to file periodic reports with the indenture trustee within the time periods prescribed by the SEC. The likely effect of the settlement is that the court decision will stand, giving greater leverage to bondholders.

The agreement relates to its 2.50% Series A convertible subordinated debentures due 2024 and 2.75% Series B convertible subordinated debentures due 2024.

As reported in the November issue of IFLR, BearingPoint failed to timely file its annual and quarterly SEC reports for several reasons, including material weaknesses in BearingPoint's...