A petition for bankruptcy has been filed against Bridge Information Systems, the financial news and information systems company, by one of its shareholders, Highland Capital.
Bridge is evaluating its options, which may include seeking a dismissal of the filing or converting it to a voluntary bankruptcy case while it reorganises. The company has 20 days to respond to the filing. The bankruptcy filing is known as a chapter 7 which aims to liquidate the debtor.
Bridge’s largest shareholder Welsh, Carson, Anderson & Stowe invested $305m in the company last June and was considering a restructuring plan to invest a $150m. The plan would also have included the conversion of its bank debt, lease obligations and accrued interest equity in the company, Reuters reports. Highland however was not prepared to sign off.
Bridge has a staff of 5,000 and operates in 65 countries. It operates a newsgathering operation, a brokerage firm, runs market data fields and an internet services group called eBridge. Its news service has 600 journalists in 100 locations.The company has had problems repaying bank loan installments for months.
Last week, Dow Jones & Co, publisher of the Wall Street Journal, said it would write off its remaining investment in Bridge, as a result of Bridge’s financial difficulties. In October, Dow Jones had written down the value of its investment in Bridge from $162.3m to $80.3m.
Automatic Data Processing also said in January that it would write down the value of its $90m stake in Bridge by $45m, on a pre-tax basis.
Bridge has said that it intends to pay employees’ wages, salaries and benefits without interruption and to fulfil its obligations to clients.