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   Technology Stocksdivine interVentures, Inc. (DVIN)

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To: stockman_scott who wrote (217)1/17/2003 2:01:20 PM
From: Glenn Petersen
   of 246
Divine unit suit: Libraries may lose $50 million

Robert Manor and Rob Kaiser, Tribune staff reporters

January 17, 2003

Thousands of libraries across the country may be out $50 million after a subsidiary of Chicago-based Divine Inc. accepted their money last year to buy periodicals but failed to pay the publishers.

Public, corporate and university libraries could soon see their subscriptions to magazines--ranging from Time to the Journal of Solid State Chemistry--cut off.

Divine executives said Thursday that the subscription service collected money from at least 3,500 libraries but spent the cash on operating costs and debt payments at the subsidiary. There was not enough left to pay the publishers and Divine could not get a loan to keep the subscriptions coming, executives said.

The Divine subsidiary, called RoweCom or sometimes referred to by its former name, Faxon, aggregates periodical subscriptions from libraries and orders them from publishers. A large library can order as many as 40,000 different publications.

The service in December told the libraries it could not supply them with the publications they had ordered, and said its corporate parent, Divine, would not support the business going forward, according to a RoweCom announcement.

"This is unconscionable, unethical and moving rapidly toward grand larceny," said Susan Davis, head of periodical acquisitions at the State University of New York at Buffalo. Her e-mail, sent to a RoweCom sales representative last month, is part of a lawsuit filed against the company by the New York State attorney general's office.

The university's library had paid RoweCom $1.3 million to subscribe to various periodicals. Asked where the money had gone, a spokesman for the attorney general's office replied, "We are trying to figure that out ourselves."

The university has recovered $500,000 and is demanding the rest of the money.

Thousands of other libraries remain in limbo, with little hard information available.

"What they have been told is RoweCom cannot place their orders for 2003," said Jude Sullivan, general counsel for Divine. He said Divine is trying to sell RoweCom to competitors, which might resolve the problem.

Sullivan gave this explanation for RoweCom's problems: The company would typically receive periodical orders from customers, pay the publishers, and later collect from the libraries. To carry it through, the company would borrow against future payments by the libraries.

But just a year after Divine took over RoweCom, no one would advance the struggling company money. "We were not able to get a line of credit," Sullivan said.

Sullivan said the money the libraries paid to RoweCom was used in other Divine operations having nothing to do with the subscription business, but said other Divine money was used to fund RoweCom.

"We have multiple subsidiaries," Sullivan said. "Was RoweCom money used to fund those operations? I suppose the answer to that is sure, because cash is cash."

On balance, he said, RoweCom received a $10 million subsidy from Divine.<?b>

In its most recent report to the Securities and Exchange Commission, for the quarter ending Sept. 30, 2002, Divine said it had $61 million in cash. Jeff Schultz, chief marketing officer for Divine, would not say whether Divine had considered repaying the libraries itself.

"If the implication is that Divine bought RoweCom for the purpose of taking a lot of orders, not placing them and just siphoning off the cash, that would be absolutely incorrect," Schultz said.

Both men declined to say how RoweCom's problems could affect Divine, which has burned through tens of millions of dollars and never earned a profit.

Many of the libraries consider the expensive, obscure journals, which detail subjects ranging from advances in neurosurgery to sociology, a necessity for professors, students and researchers. Some libraries could be forced to cut other spending to replace needed journals.

"One of the things it may mean for us and other libraries is that we cannot buy as many books this year," said Peter S. Graham, head librarian at Syracuse University, which used RoweCom. He would not disclose his school's losses.

Due to the rising costs of journals, Syracuse trimmed its list of publications from 22,000 to 11,000 over the past 11 years.

"What we're left with is the bare bones of journals that are essential," Graham said. "This is not a matter of casual choice. It's a matter of what's at the center of the faculty's needs."

Without a resolution, many large libraries could be out hundreds of thousands or millions of dollars. But smaller libraries, such as those at hospitals, might be the most affected because of their limited budgets.

"Some of them are afraid this is going to be the end of their libraries," said Ruth Holst, associate Midwest director of the National Network of Libraries of Medicine.

Some libraries were luckier than others.

Doreen Roberts, who runs the library at St. Luke's Hospital in Duluth, Minn., had sent RoweCom $37,000 for subscriptions to 142 publications, then learned of the firm's problems.

"We had sent our check late and I had it stopped," Roberts said.

Kathy Biel, deputy commissioner of finance at the Chicago Public Library, said the library was close to paying RoweCom $1.6 million for the 20,000 periodicals it orders each year.

She said the library was still examining its order with RoweCom on Dec. 18, when the company disclosed it would not be forwarding payments to publishers.

"They didn't get any money from us," Biel said.

Divine did not start out in the subscription business.

The brainchild of entrepreneur Andrew "Flip" Filipowski and with backers like Michael Jordan and Microsoft Corp., Divine was originally called Divine Interventures and sought to propel start-up Internet companies into rich initial public offerings. The company went public in July 2000, but abandoned its business model after the collapse of the dot-com bubble.

It has gone in several directions since then, mainly trying to reposition itself as a software concern that distributes electronic content.

Divine bought RoweCom for stock worth $10 million in November 2001.

Copyright © 2003, Chicago Tribune

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To: Glenn Petersen who wrote (220)1/26/2003 5:47:28 AM
From: Glenn Petersen
   of 246
New buyer in Divine unit talks

Library-service fees negotiated

By Rob Kaiser and Robert Manor

Tribune staff reporters

January 25, 2003

A Dutch company has pulled out of talks to buy a library subscription service owned by Chicago-based Divine Inc., but another firm reportedly is close to striking a deal that would help thousands of libraries get needed periodicals.

Swets Blackwell, of Lisse, The Netherlands, said Friday that the company has withdrawn its bid to acquire RoweCom, a subsidiary of Divine, after the groups couldn't come to terms.

But another firm, EBSCO Information Services of Birmingham, Ala., is close to reaching a deal to buy the unit, according to a source familiar with the talks.

RoweCom accepted at least $50 million from 4,000 libraries last year to arrange subscriptions for essential periodicals, but never paid the publishers.

Negotiators for Swets Blackwell had tried for an arrangement in which their company and Divine would put up part of the money for the subscriptions, and publishers would offer a one-year discount to make up the remainder.

"The liability issues seemed too great," said Alan J. Hess, vice president of sales and marketing for Swets Blackwell in the United States.

A spokeswoman for EBSCO declined to comment, saying, "We have a confidentiality agreement." Divine officials did not respond to calls for comment.

RoweCom creditors have sought to separate negotiations with EBSCO from those with Divine.

Under the agreement currently being negotiated, EBSCO would come up with between $10 million and $14 million to cover RoweCom obligations and buy the company. The publishers would discount subscription prices for 2003, likely by more than half, and then inherit claims that the libraries currently have against Divine, according to the source familiar with the talks.

Exact figures on how much EBSCO will pay and how much the publishers will discount prices would be determined only after thousands of libraries and publishers decide whether to participate.

The libraries would still suffer some losses because not all publishers are expected to participate in the arrangement. A second set of negotiations would then deal with Divine, which collected at least $50 million in subscription payments that it didn't forward to publishers.

The two options are to get a cash payment from Divine and have a lien against the company's future earnings or immediately seek all of the money from Divine and "punish the villains," the source said.

RoweCom has already been sued by the New York State attorney general's office, which wants to recover subscription money paid by the state university system.

Originally called Faxon, RoweCom was a major player in the subscription aggregation business. The company would put together periodical requests from corporate, public and university libraries in North America and Europe.

Many of the periodicals are scientific, technical or medical in nature, and are vital to many users.

Divine purchased RoweCom in 2001, after several years in which the company lost money. Divine executives say they spent the libraries' $50 million on RoweCom's operating expenses and repaying its debts. Divine says now that it is getting out of the subscription aggregation business.

EBSCO is a 60-year-old company with offices in 19 countries, a business relationship with 60,000 publishers and maintains a database of more than 282,000 publications.

Copyright © 2003, Chicago Tribune

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To: Sr K who wrote (108)1/31/2003 11:22:50 PM
From: Sr K
   of 246

... I'd hope they get the offering off, and then I'll follow it closely - it has the potential to be one of the all-time great shorts.

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To: Sr K who wrote (222)2/4/2003 6:19:43 PM
From: Glenn Petersen
   of 246
Nice call. This is going to have a very ugly ending.

Divine intervention gone bad

February 3, 2003

BY HOWARD WOLINSKY Business Reporter

Time has stopped for the Roosevelt University library.

So has the Chronicles of Higher Education, a newspaper for college faculty members and administrators. And subscriptions to 800 other academic journals, popular magazines and newspapers, essential to Roosevelt's teaching and research, are in limbo because of a financial mess involving Divine Inc., the Chicago technology company, and RoweCom Inc., its Westwood, Mass.-based magazine subscription subsidiary.

Roosevelt has loads of company.

Tens of thousands of subscriptions worth tens of millions of dollars for 3,500 RoweCom customers--including academic, public, corporate and government libraries, and these organizations' staffers--are jeopardized because RoweCom and possibly Divine itself took their money to cover their own slumping operations instead of buying subscriptions from publishers.

"This is the library world's Enron," said one distraught library expert.

Mary Beth Riedner, Roosevelt University librarian, lamented, "We have no idea what's going to happen with our collection, but if we do not receive the journals, it will be felt by the students and the faculty who need them for teaching."

RoweCom on Jan. 24 filed for Chapter 11 protection in the U.S. Bankruptcy Court in Boston. Creditors in a lawsuit charged that Divine raided RoweCom, transferring $73 million into Divine coffers before leaving the business.

Divine denies the charge, saying that RoweCom owes Divine $60 million.

Jeff Schultz, chief marketing officer at Divine, said Friday, "We put more than $10 million more into RoweCom than we ever took out."

In connection with the bankruptcy, RoweCom filed a lawsuit against Divine on Tuesday, charging Divine had accepted responsibility for its debts, had deepened its insolvency and later bankrupted RoweCom by fraudulently and wrongfully transferring funds from RoweCom to itself in repayment of RoweCom's intercompany loans from Divine. Divine denies the charges, but confirms that the company accepted at least $50 million for library subscriptions that were not fulfilled.

Schultz said, "We are working first and foremost to make sure all the customers get all the subscriptions. The current status is that all the largest publishers have agreed to ship subscriptions at least through February. The vast majority of subscriptions are shipping now."

Schultz said he expects the matter to be resolved as Divine completes the previously reported sale of RoweCom to EBSCO Industries, Birmingham, Ala., one of its rivals in the more than $3 billion magazine subscription-management business.

Divine's actions have created a firestorm in the library business.

Leigh Watson Healy, chief analyst for Outsell Inc., an information industry consultancy, said, "This is the worst behavior we have seen in our industry. This is the library world's Enron."

She said libraries only now are starting to feel the impact as colleges are back in session, and January subscriptions are starting to drop off.

"Many libraries placed their entire subscription renewals in the hands of Divine," she said. "I could imagine a company living without an issue of BusinessWeek, but scientific and technical publications are critical to the research agenda of many organizations."

The nation's premier health research organization, the National Institutes of Health, is the largest creditor, having paid RoweCom $2.4 million in subscriptions for medical and scientific journals. The U.S. Department of Energy's Lawrence Livermore National Laboratory near San Francisco, where much of the country's weapons research is done, was hit. Other creditors include the Library of Congress, the National Academy of Science, Johns Hopkins University, Marquette University and Ohio University.

Seven of Illinois' 12 state university libraries were affected, with Western Illinois University and Illinois State University making the list of the top 40 creditors.

James Huesmann, dean of libraries at Western Illinois in Macomb, said so far only the Peoria Journal Star, the largest paper in his region, has cut off the university.

"We're still getting the Sun-Times and Tribune. But unless something happens, we expect to lose more subscriptions: First the dailies, then the weeklies, then the monthlies, then the quarterlies," he said.

Huesmann said other libraries have offered to take up the slack by sending WIU tables of contents so students and faculty can see what's been published. Then, copies of articles could be ordered through inter-library loan.

Healy said, "Maybe that helps in the short run, but that's no way to have to run a library. It's not sustainable."

Huesmann said some publishers have extended the grace period on subscription renewals. "They're hoping to get their money if a buyout occurs. But if there is no buyout, we'll lose our money and there will be gaps in our [paper] collections."

He said the state of Illinois' precarious financial situation is only complicating matters. "Libraries could be in bad financial straits," he said. Many of his library's 2,500 subscriptions can't be read online. And loss of paper subscriptions also will result in publishers turning off access to data bases online.

WIU paid RoweCom $740,000 for subscriptions for 2003 and has confirmed that $514,000 in orders were not placed. It is awaiting an accounting of the rest.

Divine, which was founded by Chicago entrepreneur Andrew J. "Flip" Filipowski in 1999, picked up RoweCom in 2001 for $14 million in Divine stock. Divine purchased about 30 companies, many troubled, at bargain prices to build its business of providing communications services to companies and their suppliers and partners.

Divine's Schultz said, "RoweCom was in some pretty severe financial trouble. We purchased it for all the right reasons. It fit with our strategy of delivering digital content and providing online subscription management for print content." He said Divine planned to cross-sell its products with the RoweCom offerings.

Healy said, "Divine had a great vision. It was one of the strongest visions we've seen to get content to the desktop."

Divine aimed to "strip out" much of the human element to make it easier for libraries and people within organizations to order subscriptions. But she said the idea failed because it turned out that subscription management is a service that still required "human beings to solve fulfillment problems. Technology alone is not able to do that. Divine misread the challenge."

Schultz said RoweCom operated on low margins, accumulated large debts and was dependent on obtaining year-end credit lines to pay the publishers, which it failed to do last year.

Huesmann said RoweCom notified the libraries on Dec. 13 that its computer records did not correctly show subscriptions.

Then just a week later, RoweCom said: "Due to financial constraints, RoweCom has not been able to place or make payments for the substantial majority of its customer orders for 2003 subscriptions."

RoweCom said in December it wasn't able to get financing to pay the publishers for subscriptions fees for customers' 2003 orders, and was selling its European operations to EBSCO. Divine indicated it was quitting the business.

Huesmann remains concerned because the letter of agreement to sell RoweCom to EBSCO is not binding.

"They took our money and didn't deliver," he said. "RoweCom had been the leader in the business, but they have gone downhill over the past decade. Divine's purchase of the company made a lot of us uncomfortable. We had been getting rumblings that something was going very wrong."

Divine chief on board of affected school

Like thousands of other customers of RoweCom Inc., Divine Inc.'s magazine subscription subsidiary, Illinois Institute of Technology paid its money and is anxious about getting its journals now that school is back in session.

Unlike other RoweCom subscribers, IIT has an in, an inside track, a flip side: Andrew J. "Flip" Filipowski, the flamboyant, pony-tailed entrepreneur who founded Divine in 1999 as an Internet holding company, is on IIT's board.

Filipowski, 52, who dropped out of the University of Illinois at Chicago to make a mark in technology, has been on the IIT board for years and was just renewed for another three-year term. David Baker, IIT vice president of external affairs, said, "He's everything you'd want a board member to be."

The RoweCom row is causing heartburn at IIT, which paid $150,000 for 177 subscriptions, including paper copies and electronic access to back issues of some publications.

Baker said IIT is concerned about not receiving its journals: "The pain points are the graduate student working on a dissertation that to refers to articles in the literature and the assistant professor trying to get tenure who is preparing an article for a peer-review journal who won't be able to do his research."

He separated Filipowski from the RoweCom problem, which he described as "a business deal."

Still, why not ask Flip to help the libraries out anyway? "It may come to that," Baker said.

Howard Wolinsky

Copyright © The Sun-Times Company

All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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To: Glenn Petersen who wrote (223)2/9/2003 1:55:56 PM
From: Glenn Petersen
   of 246
RoweCom purchase haunting Divine

Buyer infected by problems it couldn't cure

Rob Kaiser, Tribune staff reporters
Published February 9, 2003

For a flamboyant dealmaker like Divine Inc.'s Andrew "Flip" Filipowski, it would be hard to find a less sexy business than placing libraries' subscriptions to obscure journals such as Tetrahedron, a must-read for chemists.

Yet Divine's opportunistic CEO was determined in late 2001 to buy just such a business--RoweCom Inc., a troubled Massachusetts public company.

Filipowski's chief financial officer counseled against the deal, as did at least one outside financial adviser, according to one person who participated in the discussions.

But Filipowski wanted to buy RoweCom for two reasons.

Despite its losses, RoweCom's $348 million in sales would build Divine's revenues, helping Filipowski make good on his boast to shareholders to create a $1 billion in sales company from the ashes of the dot-com disaster that killed his Internet incubator.

Filipowski also was convinced he could turn RoweCom into a marketing machine. He envisioned selling Divine's software to leading libraries and publishers in the rarefied world in which scholars and scientists exchange ideas.

RoweCom not only would turbocharge Divine's sales. It would also put a glossy sheen on the patchwork of financially strapped companies that Filipowski's team was buying to create a software company in the turmoil following the tech collapse.

What ensued did not come close to Filipowski's plan.

Bankrupt RoweCom's problems now threaten Divine's future and spotlight the Chicago company as a culprit in a high-profile financial mess.

"This is unquestionably the biggest financial collapse America's libraries have had to deal with," says American Library Association Executive Director Keith Michael Fiels.

The unfolding scandal left hundreds of libraries without important periodicals and out more than $65 million collectively in subscription fees Divine allegedly failed to forward to publishers, according to RoweCom's lawsuit against Divine.

The suit, in a Delaware bankruptcy court, seeks the return of at least $74 million to RoweCom--a sum that almost certainly outstrips Divine's cash.

Librarians around the country are calling state watchdogs about missing money and periodicals.

Illinois Atty. Gen. Lisa Madigan launched an investigation last week. More suits are likely following a civil fraud action against Divine in December by New York's attorney general on behalf of a university in upstate New York. That suit seeks $50 million in damages.

Survival threatened

The mess not only has left a stain on a high-profile venture that was supposed to place Chicago on the high-tech map. It also reduces the odds of Divine's survival,

Sources close to Divine say the company needs a cash infusion or a buyer, as well as favorable terms in settling RoweCom's claims.

Divine says RoweCom's suit is "completely without merit" and that it would prevail if it were forced to litigate.

"We expect the RoweCom situation to be resolved shortly through the completion of the sale to EBSCO" Industries Inc., a financially sound competitor, Divine said in a statement Friday.

"With the sale nearly completed we are focusing on our core businesses and customers and are excited about some of our new business initiatives," Divine said.

RoweCom's sale to EBSCO would go a long way toward resolving the library crisis because EBSCO can afford to work with publishers to keep subscriptions going while continuing to negotiate claims against Divine.

Yet Divine's problems go deeper.

In a severely depressed software market, the company still has too few sales and too many employees--2,244 worldwide, including 376 in Chicago--to turn a profit.

Divine burned through $27 million in the third quarter, leaving it with $63 million in unencumbered cash as of Sept. 30. It had drawn about $10 million on a $40 million line of credit from LaSalle National Bank, according to Securities and Exchange Commission filings.

Divine's fourth-quarter report is scheduled for Feb. 25, when it is expected to take a large writedown of goodwill--a non-cash charge.

Meanwhile, the company's stock has sunk again into penny stock territory, trading in the 70-cent range, below the $1 minimum for Nasdaq listing--nine months after a reverse-stock split boosted the price to about $5 per share.

Total market value has fallen to about $19 million--less than one-third the $61 million equity infusion last year from Oak Investment Partners, a well-regarded private equity firm.

Oak, which has two seats on Divine's board and controls the company through its preferred stock holdings, is Divine's most likely savior in a cash crisis.

Fred Harman, Oak's lead partner on the Divine investment, was unavailable Friday, and Filipowski did not return telephone calls.

"They're not just going to throw good money after bad," said a former Divine financial adviser. "[Oak] will have to be very well satisfied there's a good potential return."

Still, investors who know Filipowski, and his sale of Platinum Technology International Inc. when that firm was financially troubled, say it's not smart to count him out.

"I find it very hard to believe [Divine and Oak] are out of bullets this early," says a private equity investor.

RoweCom was an unlikely acquisition for a software company.

Kent Mulliner, collection development coordinator for Ohio University in Athens, recalls Divine/RoweCom's large booth at a library conference last summer in Atlanta. Divine was demonstrating software to let librarians and patrons chat online.

But Ohio's university libraries already were using a competitor's software.

"I told them, `This sounds like a great product,'" Mulliner recalls, "`but you're late to the party.'"

RoweCom's main business is subscriptions. The company is a distant third among the industry's top three agents, which pool millions from libraries to place orders for thousands of magazines, mainly scholarly and scientific journals.

RoweCom's $348 million in 2001 gross sales was largely subscription money. Net sales--the portion RoweCom keeps to operate its business--totaled less than 10 percent.

Agents must tightly manage cash flows. Historically, libraries forward money to agents at the end of their fiscal year, in June or July, while agents typically don't pay publishers until late fall.

"It's a nice opportunity to make some money off the float for those few months," says industry analyst Leigh Watson Healy of research firm Outsell Inc.

But agents also must plan for a year-end cash squeeze because money that isn't paid in advance arrives in January or February.

RoweCom, which had incurred losses due to poor investments, was facing a cash crisis when Divine bought the company. At the time, Divine closed the gap with bank financing. But a year later, when RoweCom was caught in a similar crunch, Divine--whose own cash had dwindled--could not arrange financing.

Looking for buyer

Anticipating the crisis, Divine had been scouting a buyer. But when it could not close a sale or arrange credit to pay publishers, it notified libraries in late December that it would no longer support the business.

Librarians and publishers formed a committee to negotiate with Divine and EBSCO, which finalized an agreement last week to buy RoweCom's European operations. Talks continue over the more troubled North American operations.

Divine's actions raised "concerns for the whole industry," says Mark Seeley, general counsel for publisher Elsevier Science Ltd., a leading journal publisher.

Copyright © 2003, Chicago Tribune

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To: Glenn Petersen who wrote (224)2/18/2003 7:07:35 AM
From: Glenn Petersen
   of 246
Divine wooing buyers for units

Sales would help in a bankruptcy

By Barbara Rose
Tribune staff reporter

February 18, 2003

Divine Inc. is contacting potential buyers for its software and services businesses in an 11th-hour scramble to raise cash and also strengthen its position in a possible bankruptcy filing, according to sources familiar with the discussions.

A Divine spokeswoman said Monday that the company does not comment on speculation.

Divine's stock has plummeted on rumors that the company can't survive its latest cash crisis, including claims by a bankrupt subsidiary, RoweCom Inc., that Divine owes the business a total of $74 million.

Divine's stock fell by about 50 percent last week to close at 35 cents per share Friday. The market was closed Monday.

In recent days, Divine has contacted investors to invite them to do due diligence on various business units in advance of a bankruptcy filing, according to an investment banker and an unrelated potential buyer.

"They reached out to us in a very aggressive manner and gave a pretty strong indication they're going to file bankruptcy," said the potential buyer, who asked not to be identified.

The financial adviser said that by lining up buyers, Divine strengthens its prospects for an orderly wind-down. It's rare for software firms to emerge from bankruptcy.

Divine's management team "is trying to sell pieces," the adviser said. "Various advisers are selling pieces."

Negotiations, meanwhile, are continuing to sell RoweCom to a large, financially sound private company, EBSCO Industries Inc.

Divine has said the RoweCom sale would resolve Divine's problems and allow it to focus on its core business, which is selling software and services, including consulting and Web hosting.

Yet rumors persist that Divine is too troubled to survive the RoweCom crisis.

Ironically, Divine's biggest creditor--apart from RoweCom's disputed claim--is likely to be the bankruptcy trustee of another former Internet highflier that once turned to Divine for help.

MarchFirst Inc. was facing a cash crisis in spring 2001 when Divine's founder and chief executive, Andrew "Flip" Filipowski, bought the company's Midwest operations for $12.5 million cash and a balloon payment due in five years.

That $57.5 million payment is due in April 2006.

Meanwhile, Divine has more pressing problems.

Divine burned through $27 million in the third quarter, leaving $63 million in unencumbered cash as of Sept. 30, according to its most recent quarterly report filed with the Securities and Exchange Commission.

At the time, Divine had drawn about $10 million on a $40 million line of credit from LaSalle National Bank, according to the filing.

Divine's fourth-quarter report is scheduled for release on Feb. 25, when it is expected to take a $300 million writedown of goodwill--a non-cash charge.

Observers had speculated Divine's most likely savior would be Oak Investment Partners, which last year effectively bought control of the company with its investment of $61 million.

Oak Investment Partners's managing partner Fred Harman did not return telephone calls Monday.

Copyright © 2003, Chicago Tribune

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To: Glenn Petersen who wrote (225)2/18/2003 10:37:45 AM
From: Glenn Petersen
   of 246
Divine May File for Bankruptcy

Tuesday February 18, 8:55 am ET

CHICAGO (Reuters) - Software services firm Divine Inc. (NasdaqNM:DVIN - News), which has struggled amid a prolonged slump in technology spending, on Tuesday said it would explore strategic alternatives, including filing for bankruptcy protection.

Divine, an Internet incubator turned business software developer, said it had hired Broadview International LLC to advise it on its options, which could also include divesting assets or similar deals.

Divine said it is in active discussions to sell several businesses or assets.

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To: Glenn Petersen who wrote (226)2/18/2003 10:48:41 AM
From: dave rose
   of 246
Does anyone think that Andrew "Flip" Filipowski should go to jail for dragging this company to bankruptcy? Do you think that Flip is destitute?

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To: dave rose who wrote (227)2/18/2003 12:21:47 PM
From: Glenn Petersen
   of 246
Flip won't go to jail, but he will be a pariah in the Chicago business community. Come to think of it, he was a pariah before he took DVIN public. <gg>

This was an IPO that never should have happened. It was forced out in July 2000, long after the peak of the bubble. I have a friend who participated in a 1999 private placement, picking up 60,000 shares at $1. He put them into the accounts for his two young children He was thinking $1 million plus. The kids were going to be on easy street. That was before the pre-offering one for six reverse split and the recent one for twenty-five. The kids now have 400 shares at $.35. Welcome to the work force.

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To: Glenn Petersen who wrote (228)2/18/2003 4:11:26 PM
From: dave rose
   of 246
Make that 400 shares @ $.21.
Shame Shame Shame.

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