Altegrity Files Bankruptcy; Lost OPM contract following USIS hack
Add Altegrity to the short list of businesses that collapse following a data breach, although it may not be the consequences of the breach that were solely responsible.
Since August 2014, Altegrity Inc., the government contractor principally owned by private equity firm Providence Equity Partners, has been dealing with the consequences of a cyber-attack in one of its units, US Investigations Services (USIS). The breach raised alarms because it exposed the personal details of an estimated 25,000 employees of the Department of Homeland Security, U.S. Immigrations and Customs Enforcement, and the U.S. Customs and Border Protection agency.
Already under some strain from the Department of Justice charging them in January 2014 with bilking the government out of millions of dollars for improper background checks, Altegrity suffered a third major blow when the Office of Personnel Management (OPM) announced that it would not extend its contracts with USIS past the September 30, 2014 expiration.
Now Linda Sandler and Andrea Tan of Bloomberg News report that the firm has filed for bankruptcy:
The company went into bankruptcy court in Delaware with a $700 million debt-cutting plan already approved by most of its secured lenders and a promise of new money from funds such as Third Avenue Management LLC. The deal, along with asset sales, might knock out 40 percent of its loans, according to court papers filed Sunday.
The restructuring came in response to the government’s “unforeseen” decision to end “substantial” contracts last year after a hacking attack that Chief Financial Officer Jeffrey Campbell described in a court filing as a “state-sponsored data intrusion.” The vetting jobs had brought in $304 million in the latest 12 months, or 22 percent of revenue, he said.