divine Files Chapter 11

Feb 28, 2003

divine, inc. announced February 25, that its board of directors has authorized divine and several of its subsidiaries to file a voluntary petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code. divine expects operations to continue uninterrupted and has retained critical staff during the Chapter 11 reorganization and sale process. Casas, Benjamin & White LLC (CBW), a financial advisory firm that specializes in corporate restructurings, will assist divine's current management team in handling day-to-day operations. This news come only one week after divine announced that its efforts to minimize operating costs and liabilities had been unsuccessful and it had enlisted Broadview International LLC to explore options for further reducing expenses. divine and CBW intend to continue to explore strategic options with Broadview, including the possible sale of its assets, in order to maximize return to creditors. divine has received a letter of intent from financial investment firm GTCR Golder Rauner LLC to acquire divine's business in its entirety. Any sale of divine's assets would be subject to section 363 of the Bankruptcy Code, final approval of the Bankruptcy Court, and an auction process to yield the highest and best offer. divine's filing of Chapter 11 was announced approximately one month after it announced the sale of RoweCom, a subsidiary subscription management business, to EBSCO. At the end of January, RoweCom filed for bankruptcy and announced a 14-count lawsuit against divine, alleging that divine mishandled over $73.7 million in RoweCom funds.