U.S. Interactive files for bankruptcy; CEO resigns

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In a series of announcements yesterday, Internet professional services company U.S. Interactive (www.usinteractive.com), Cupertino, Calif., filed for Chapter 11 bankruptcy protection and accepted the resignation of its CEO. Additionally, Nasdaq, which had halted trading of the company's stock late Friday, said yesterday that it had suspended trading of the stock until its request for additional information had been satisfied by the company. The flurry of news comes after the company announced it would have a third-quarter loss of $25.6 million.

Mohan Uttarwar, who had been appointed CEO in mid-November, said he would resign from the offices of CEO and president, but would remain on the company's board of directors. A successor is to be named in the near future. Vinay Deshpande, co-founder of the company's Soft Plus business unit, is leading the Executive Management team under the Chapter 11 proceedings to assist in development of a reorganization plan. "The reorganization plan will position the Company to focus on business infrastructure solutions for the communications industry," he said in a statement. "The company believes that this segment of its business will continue to grow and provide a continuing source of potential revenue." In papers filed in U.S. Bankruptcy Court in Delaware, the company listed $430.7 million in assets and $102.9 million in debts. Three weeks ago, the company said it would close its Los Angeles office, with 60 employees, and move its headquarters from King of Prussia, Pa., to Cupertino, Calif., as part of a cost-cutting strategy. In filings with the SEC, the company said it had to write off $8.8 million in "uncollectible accounts" in September 2000 "primarily related to services performed for dot-com organizations."

Copyright January 2001, Crain Communications Inc.

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