InaCom Corporation

Client

Shortly before it filed for bankruptcy, InaCom Corporation was a $5 billion equipment distributor and provider of post-sales support for computers and computer systems, primarily to Fortune 1000 companies.

Challenge

The Company ceased operations in North America in June 2000, abruptly closing approximately 125 locations and terminating approximately 5,000 employees in North America. International operations in South America, Europe, and Asia-Pacific continued to operate as going concerns. In addition the Company was in the middle of an SEC investigation. Bridge was engaged by the Board to manage the orderly wind down of the business. The Bridge team faced over $1 billion in filed claims, over $200 million in potential preference actions to be analyzed, the need to liquidate assets worth in excess of $250 million and track and locate the documents necessary to effect this liquidation and the assertion by the United Trustee and the Court that “the case was dead on arrival and had no value for creditors”.

Solution

Bridge developed a series of initiatives to liquidate the Company’s remaining assets, which included operating units in Europe, Asia, Mexico and South America. Bridge also managed the liquidation of a $250 million accounts receivable portfolio and all tangible property associated with the 125 locations. Additionally, post confirmation, Bridge providing expert testimony for the post-confirmation liquidating trust on “solvency” and “ordinary course” issues relating to the post-confirmation Trust’s actions to increase recoveries through preference litigation.

Results

Pre-confirmation, the liquidation generated approximately $125 million in cash for distribution to creditors, sufficient to pay 100 percent of the approved claims to secured and priority creditors. Unsecured creditors received approximately 40 percent of their allowable claims. The post-confirmation preference litigation has generated another $10 million in net recoveries on approximately $20 million in litigated preference claims.