Incentra Files Chapter 11 Bankruptcy

Incentra Solutions, Inc filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware. As part of the process, the Company and its senior lenders, a group of investment funds managed by Valens Capital Management, LLC and Laurus Capital Management, LLC (the Lenders), have entered into an Asset Purchase Agreement, that is proposed to be consummated using a Section 363 sales process. The Company and the Lenders have agreed to a debtor in possession (DIP) financing facility to ensure uninterrupted operations of the business during the bankruptcy.

This process will significantly improve the Company’s balance sheet and liquidity. The Company has secured the continued availability of it’s revolving credit facility as a source of DIP financing. These additional funds along with the Company’s continuing cash collections should provide sufficient resources to meet the Company’s ongoing obligations. The Company plans to continue operations as is with no interruption in the delivery of services and technologies to its customers throughout the United States and Western Europe.

"In today’s economic conditions, we are pleased to have achieved such strong support for a sale of the business that is beneficial to our employees, customers, and partners by dramatically improving our balance sheet, eliminating some debt service obligations, and enabling continued investment in our services and future growth. This process will give Incentra a strong balance sheet, and allow us to take advantage of opportunities in the current economic environment while continuing to provide exceptional products and services to our customers. We look forward to the continued support of our senior lenders and their long-term commitment to the business," stated Chairman and CEO Thomas P. Sweeney.

The Company plans to complete the sale and have the assets emerge from bankruptcy as quickly as possible, as the Asset Purchase Agreement with the senior lenders has already been approved by the Company’s Board of Directors and will be filed with the Court in connection with the Company’s motion to set a hearing date to approve the sale. Customers will not see any deterioration in the level of service or support they receive from Incentra and partners will be able to continue to count on the Company to deliver the consulting, technology and outsourcing services that the market requires.

The Company continued its record growth in 2008 with revenues up 46 percent to $212 million over 2007. The Company continued to experience strong growth in its services portfolio with revenues up 26 percent for consulting and outsourcing services.