With its balance sheet in order and plenty of public sector work on the horizon, firm leadership insists they are 'cautiously optimistic' about the future
Between feb. 18, the day BearingPoint filed Chapter 11 Bankruptcy protection for its U.S. operations, and March 6, it sold $83 million in new contracts—$70 million of it in public sector business.
"I think there was a conceptual sigh of relief on the part of our employess and clients that we've now fully defined our next step," says Robin Lineberger, executive vice president, global pubic services for Bearing-Point. "All of those rumors that our competitors and others were swirling around about us were finally put to bed."
What BearingPoint did in its filing, in essence, was reach agreements with its senior debt holders that allowed it to restructure its balance sheet—moving from more than $1 billion in debt to a little over $300,000—thus freeing up much needed capital to invest back into the business, Lineberger says. In addition, it was facing potentially crippling near-term payment obligations.
"Finally fixing our balance sheet provides us with a solid financial platform that allows us to get back and push into those markets that we've traditionally served," Lineberger says.
Those markets are public services, commercial services and financial services, but public services is where the firm will focus, at least in the short term.
"Government work, particulary the federal market, is where we'll double our efforts because it represents the greatest growth opportunity given President Obama's initiatives," he says. "As a firm, we're very well positioned for these opportunities."
For now, Lineberger says it's "business as usual" at BearingPoint among employees and clients, who have been supportive of the firm's course of action. "We're cautiously optimistic," he says.
As far as the end game, Lineberger says the plan isn't to sell all or parts of the business, but says it would be "structurally easier" to do so now because the firm's not sitting on a mountain of debt. "Now the board will be able to make an unbiased assessment of any offers" the firm may receive, he says. "But after all that, why would we throw in the towel and sell? Let's go work it now."
—Joseph Kornik
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