Microage Case Study

In 2000 MicroAge was delisted from the NASDAQ, trading over-the-counter as MICAQ. In 2001 it filed for bankruptcy, terminated all business and liquidated all remaining assets to pay creditors. One of the founders, Jeffrey D. McKeever, subsequently bought the rights to the name “MicroAge” and uses this as a “doing business as” name for Frontier Technology LLC. The new company organized by McKeever has a different ownership structure and legal company name from the original MicroAge. MicroAge is currently headquartered in Tempe, Arizona and is one of the prominent IT reselling companies in the industry. With the slogan, “The IT Solutions Experts” MicroAge plays off their history in the tech world to provide companies with the right tech solutions and products to fit their various needs.

MicroAge Inc. announced this morning that it has moved into the next phase of its e-business services transformation. The company, which filed for reorganization under Chapter 11 of the bankruptcy code last week, told the media earlier this month that it planned to transform itself more into a B2B technology solution provider. Restructuring began in 1998.

Bankruptcy under chapter 11
The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under chapter 11, without the appointment of a case trustee. A debtor will remain a debtor in possession until the debtor’s plan of reorganization is confirmed, the debtor’s case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. The appointment or election of a trustee occurs only in a small number of cases. Generally, the debtor, as “debtor in possession,” operates the business and performs many of the functions that a trustee performs in cases under other chapters. 11 U.S.C. § 1107(a).s

PROBLEMS FACED:
1. Time frame was too less to restructure them self virtually
2. To form a virtual infrastructure – difficult process
3. Costs required to set up – infr + severance package
4. Downsizing (Approximately 200 positions in Arizona & 100 outside the state have been eliminated – 98) & Outplacement (The process of
facilitating a terminated employee’s search for a new job by provision of professional services, such as counseling, paid for by the former employer.) 5. Hiring people well adapt with technologies