OSI file Chapter11

[bigun]

What is the name of your state?
Things getting tough in debt collecting land!

OSI Announces Voluntary Chapter 11 Filing, Financing to Support Ongoing Operations

May 13, 2003 — ST. LOUIS, MO. - Outsourcing Solutions Inc. (OSI) yesterday announced that the company and certain of its domestic subsidiaries have voluntarily filed for reorganization under Chapter 11 in U.S. Bankruptcy Court for the Eastern District of Missouri in St. Louis.

The company also announced that it has secured a commitment for $22 million in debtor-in-possession (DIP) financing to fortify its strong, positive cash flow in order to ensure it has the resources to continue to conduct business-as-usual during the reorganization process. "The voluntary filing will enable our company to continue business as usual - including meeting our commitments to our clients, associates and suppliers - while we work with our creditors to finalize a plan for reducing OSI's debt and restructuring our balance sheet so we can emerge as a financially healthy company for the long term," said Kevin T. Keleghan, president and CEO.

Keleghan, who joined OSI as president and CEO in December 2002 to guide OSI's restructuring, commented, "Over the past several months, we have reached agreement with the overwhelming majority of our banks on a plan that reduces our debt from about $600 million to about $175 million. In the course of those negotiations, it became obvious that the fastest and most efficient way to complete our debt restructuring was to use the Chapter 11 process to gain acceptance of our plan. Reaching resolution quickly is clearly in the best interests of the company, our associates and our clients. "Over the past several years, OSI has transformed itself from a collection of several acquired, national and regional companies into a fully integrated business process outsourcing firm focused on receivables management, setting industry standards for results and responsiveness and serving many of America's leading companies and institutions," Keleghan said. "By entering Chapter 11 with substantial agreement on the key elements of our plan, we believe we will be able work swiftly to secure creditor and court approval of a final plan that will give us the financial strength we need to fully develop the potential of our company."

Paul Wood, managing director of Madison Dearborn Partners, an equity investment firm that is the major equity holder in OSI, said, "OSI's strong operations and leading position in a growing industry give it outstanding potential for growth. It is a good fit with Madison Dearborn's strategy of investing in companies with outstanding management teams that can achieve significant long-term appreciation in value. We are confident that creating a more realistic debt burden for OSI will enable it to realize that potential, and we are backing that confidence with a $10 million additional equity investment in the company."

OSI is a leading business process outsourcing (BPO) firm providing receivables management services, which link a company's cash flow objectives with credit management policies from beginning to end of the credit-to-cash cycle. By improving the revenue cycle, OSI enhances the financial performance of America's leading companies, as well as government entities, healthcare providers, educational institutions and other credit grantors. With industry-specific strategies and services, OSI delivers results that improve the bottom line through accelerated cash flow, lower operating costs, reduced bad debt expense, and improved customer retention. OSI provides receivables management outsourcing to a blue chip roster of Fortune 500 clients. Headquartered in St. Louis, OSI has nearly 8,000 associates in nearly 70 offices doing business in 25 states plus Canada, Mexico, and Puerto Rico. For more information about OSI, visit [url]www.osioutsourcing.com[/url]


Source: Company press release

[Ladynred]

Oh yeah.. I'm gonna cry a lot of tears over THIS one !!! ROFL !

Too bad the company won't just fold and go away....

They obviously haven't been too successful at collecting yet. I wonder who will be calling them to collect when they default on those DIP loans.