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Technology Stocks : divine interVentures, Inc. (DVIN)

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To: dave rose who wrote (236)4/11/2003 7:52:14 PM
From: Glenn Petersen   of 246
Do you think they will get him?

One would hope, though it is doubtful. They can't even get their bankruptcy filings done correctly.

Judge warns Divine management

Company misses deadline; trustee may be appointed

By Barbara Rose
Tribune staff reporter

April 11, 2003

The judge overseeing Divine Inc.'s bankruptcy has threatened to oust the software company's managers and appoint a federal trustee to oversee its reorganization if the firm doesn't meet a court-ordered deadline Friday.

The reprimand came in a strongly worded order this week from U.S. Bankruptcy Judge Joan Feeney in Boston, where Divine filed for Chapter 11 protection in late February.

Divine was required to file a statement of its assets and liabilities and other information about its financial affairs, complete with affidavits from corporate officers, within 15 days of its bankruptcy filing.

Divine asked for an extension in March, which is not uncommon in bankruptcies, according to attorneys. But it's rare for a company to miss an extended deadline without explaining why more time is needed and requesting another extension, the attorneys said.

In Divine's case, the company's lawyers failed not only to ask for more time when the extended deadline passed on April 3, they filed incomplete information four days later, on April 7, according to Feeney's order.

Divine's behavior raises "numerous possible adverse inferences, including mismanagement or incompetence," Feeney's order states.

Mismanagement is grounds for appointing a trustee to run Divine's reorganization--an action that Feeney said she will take "without further notice or a hearing" if Divine fails to complete its filings by Friday.

"It's a threat, and a pretty strong threat," said Chicago bankruptcy attorney Lawrence Snider of Mayer Brown Rowe & Maw.

Snider and other attorneys said the judge's response, given the circumstances, would not be unusual.

"Judges become very perturbed when you start ignoring deadlines," said bankruptcy attorney August Pilati of Chicago's Gesas, Pilati, Gesas and Golin Ltd.

Calls to Divine's bankruptcy attorneys at Latham & Watkins in Chicago and Mintz, Levin, Cohn, Ferris, Glovsky and Popco in Boston were not returned Thursday.

Divine spokeswoman Susan Burke said, "It remains our policy not to respond to inquiries about this process."

Feeney's order came as Divine was headed toward an auction of its assets and sale of the company next week.

Feeney postponed a decision this week on Divine's request to hold the events on April 17 and 18.

Copyright © 2003, Chicago Tribune
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