Despite its efforts, NSI files Chapter 7
FULLERTON, Calif. - A systems integrator that appeared to have climbed out of Chapter 11 bankruptcy protection with a reorganization plan, new name and the sale of several divisions filed Chapter 7 in early June.
The company, which most recently went by the name National Systems Integration but was previously known as IntelliSec, abruptly closed the door at three locations in California on June 11 after it filed to liquidate assets, leaving hundreds of customers and service contract agreements behind.
Former executives at National Systems Integration could not be reachedÃ‚Â for comment.Ã‚Â The companyÃ¢â‚¬â„¢s investors, MCG Capital and Apax Partners, who were listed in court documents, did not return phone calls by press time.
According to a former employee of National Systems Integration, who asked not to be named, the company worked itself into a financial hole. Filing ChapterÃ‚Â 11 drainedÃ‚Â the company of $1 million in legal and other fees. After the filing, a number of vendors would not give the systems integrator credit terms - product orders had to be paid upfront.
Ã¢â‚¬Å“It got into a big snowball,Ã¢â‚¬Â explained the former employee.
The company was pursing a new owner, with several companies expressing interest, but time ran out.
Ã¢â‚¬Å“There was a deal in place,Ã¢â‚¬Â said the former employee. Ã¢â‚¬Å“We thought we had a sale. But it collapsed at the last minute.Ã¢â‚¬Â
Documents from the United States Bankruptcy Court for the Central District of California from the companyÃ¢â‚¬â„¢s Chapter 7 filing showed it has debt totaling $5 million and assets of $2.3 million. The company owes money to former employees, security companies such as Fire-Lite Alarms and Lenel Systems, and the Internal Revenue Service.
IntelliSecÃ¢â‚¬â„¢s financial woes began in early 2002 when it filed Chapter 11. At that time, the company employed close to 200 people and operated a fire division in Arizona and a central station. Court documents showed it owed $2.4 million to its 20 largest unsecured creditors.
After it sold its Arizona-based fireÃ‚Â installationÃ‚Â firm, Copperstate Technologies, and its monitoring arm, the company approached the market with a paired down strategy. It adopted the name National Systems Integration and planned to focus on the California market and the integration side of the business.
Despite its efforts, and recording $14.3 million in gross revenues in 2003, the company failed. It filed Chapter 7 on June 11 and closed operations that day. Today, it owes money to $1.1 million to MCG Capital and $613,185 to Apax Capital, two of its investors.
Court documents also allege that chief financial officer Michael Levy stole $100,000 from National Systems Integration. Records show he left the company in March 2004.