BearingPoint calls expected acceleration on convertible debentures 'invalid and wholly without merit'

By Caroline Salls

Pittsburgh, Nov. 7 - BearingPoint, Inc. said it will reject as invalid and wholly without merit any acceleration notice that it may receive as early as tomorrow with respect to its series A or series B convertible subordinated debentures, according to a company news release.

"We have previously stated that we believe the September notices of default are invalid and completely without merit," the company stated in the release. "Since the alleged notices of default are wholly defective, we believe that any related notice of acceleration is in turn without any basis whatsoever."

BearingPoint said it has complied fully with its Securities and Exchange Commission filing obligations under the debentures.

The company said it intends to vigorously oppose any attempt to enforce an acceleration notice and will evaluate holding the relevant parties liable for any damage to the company and its investors "resulting from such an invalid and improper action."

On Sept. 16, BearingPoint disclosed that it had received purported notices of default from two law firms claiming to represent holders of the $250 million series A convertible debentures and the $200 million series B convertible debentures that were issued by the company in December 2004 and January 2005.

The law firms said at the time that the company was in default because it failed to make SEC filings in a timely fashion.

The 60-day period for the company to cure any purported default by filing its 2004 form 10-K and its 10-Q forms for 2005 will expire at the close of business on Tuesday with respect to the series B debentures and at the close of business on Monday with respect to the series A debentures.

Both law firms have informally indicated that they intend to submit notices of acceleration to the company after the expiration of the purported cure periods, which would likely demand that BearingPoint repay the debentures immediately.

BearingPoint is a Mclean, Va.-based management consulting firm.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.