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System Integrators Inc. Files for Chapter 11

Magazine article Editor & Publisher

System Integrators Inc. Files for Chapter 11

Article excerpt

SYSTEM INTEGRATORS INC. and its parent company, SI Acquisitions Corp., late last month petitioned for reorganization under Chapter 11 of the bankruptcy code. It filed in Wilmington, Del., where the holding company was incorporated.

In Sacramento, SII spokesman Roger Peterson said that after almost two years of unsuccessful efforts to renegotiate its bank debt, the publishing systems vendor decided that reorganization is its only recourse.

Chapter 11 proceedings, he said, were the only way to get the attention of Bank of America, Chase Manhattan and two foreign banks.

"This way, we'll be able to come out of this with a fairer loan structure," Peterson said. "We're fairly confident this will be short-lived, as Chapter 11's go."

He said SII president Michael Reisenweber told employees that while reorganization can take from a few weeks to a year, the company's situation is not complex and could be resolved quickly. A petitioner has 120 days to file a plan for reorganizing.

In a release noting the company's "strong cash flow" and operating profit, Reisenweber said that lacking a "timely agreement with the bank group, management and the board concluded that the most prudent course of action . . . would be to file under Chapter 11 ... to ensure that SII will have the right capital structure to take advantage of growth opportunities .... "

Reisenweber added that daily operations continue unchanged, contracts will be met, employees are being paid, no one is being laid off, products will be shipped and 24-hour customer service will continue. Peterson said the company will exhibit as planned at the IFRA exposition in Amsterdam, the Netherlands, Oct. 11-14.

Noting that SII is in far better financial shape than it was during the recent recession years, Peterson said, "There will be no terminations; hiring will continue" -- a reference to slots to be filled in its research and development and marketing departments.

After paring staff, converting to software development only and compatability with standard hardware and software platforms, and changing its product line, SII has regained business, company officials said.

The firm rounded by Jim Lennane in the 1970s and taken public under his leadership in the 1980s was bought out in 1989 by a management group competing with him. The buyout occurred when interest rates were near their peak and just before the onset of a severe three-year slump in the newspaper business, which until very recently was SII's only market. …

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