Bankruptcy
Aug. 13, 2002
IntelliSec Hires Irell to Steer Its Reorganization
Security company IntelliSec and several affiliates have selected Los Angeles-based Irell & Manella to represent them in their California bankruptcy cases.
Security company IntelliSec and several affiliates have selected Los Angeles-based Irell & Manella to represent them in their California bankruptcy cases.
In April, IntelliSec filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Santa Ana. The company installs and services fire and security systems across the nation.
Some of IntelliSec's financial problems stem from a spate of recent acquisitions, according to documents filed with the court. The anticipated increases in efficiency expected from the combinations didn't pan out, which was one factor that pushed the Fullerton-based company into bankruptcy. Among its other financial problems were a lack of effective cost controls and unanticipated legal expenses from defending several lawsuits.
IntelliSec has regional offices in California, Arizona and North Carolina. The Bankruptcy Court recently approved the sale of the Arizona operations to MCG Capital Corp., and IntelliSec plans to sell the North Carolina operations.
Meanwhile, IntelliSec is in discussions with lenders and the creditors' committee regarding the reorganization of the California operations.
IntelliSec plans to use the proceeds from the sale of the Arizona and North Carolina operations to pay off a large portion of its secured debt, according to court documents. It aims to centralize operations in California and return to profitability.
"The company is hopeful to emerge from Chapter 11 in the near future," says Jeffrey Reisner, a Newport Beach partner at Irell & Manella.
The court also has approved debtor-in-possession financing of $2 million.
Reisner and Newport Beach associate Roger Friedman are the lead attorneys for IntelliSec.
Phoenix-based Snell & Wilmer represents the creditors' committee in the case, with Irvine partner Nanette Sanders serving as lead counsel.
Toni Vranjes
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