Alert Staffing Starts Over After Bankruptcy Filing
By NICOLE TAYLOR and LAURENCE DARMIENTO
After resolving a dispute with global staffing powerhouse Adecco SA that threatened its survival, personnel agency Alert Staffing has emerged from bankruptcy.
The Culver City firm came out from Chapter 11 protection on Feb. 6 after Chief Executive Victoria Lowe and her partner Roy Gardner paid Adecco an undisclosed sum for the Alert name and its assets in exchange for the two sides ending their relationship, according to Alert attorney Angela Sousa.
“We are out from under the battle,” said Lowe, a prominent local African American executive.
Alert, launched in 1995 with the financial backing of Switzerland-based Adecco, now expects to collect up to $3 million in disputed receivables from its clients so it can pay off creditors at about 15 cents on the dollar. The company entered bankruptcy last June, owing creditors $20.6 million, according to documents filed in U.S. Bankruptcy Court.
Representatives from Adecco did not return repeated calls for comment.
Lowe formed Alert eight years ago as part of Adecco’s efforts to fill diversity requirements under contracts it had with clients that require business go to minority-owned firms.
Adecco invested an undisclosed sum for a 49 percent stake in the agency and handled the financial operations while Lowe ran day-to-day business, Lowe said.
The firm grew rapidly in the late 1990s with a roster of large telecommunications clients, including Fortune 500 companies like AT & T; Corp. It reported revenues of $204 million in 2000, making it No. 1 on the Business Journal’s 2001 list of largest women-owned businesses in Los Angeles County.
But Alert and Adecco’s relationship turned sour in 2000 following Alert’s decision to also take control of the agency’s back-office operations. Lowe claimed Adecco, which has a large-scale staffing business that runs independently of Alert, began to see her as a competitor and demanded $11 million it put into the agency’s operations. Lowe said she believed the money was an infusion of equity but Adecco claimed the money was a loan.
Revenues fell to $90 million in 2001 and Alert filed for Chapter 11 bankruptcy protection. It came close to liquidating after being unable to reach an agreement with Adecco and other creditors. An accord was finally reached earlier this month under a deadline imposed by a U.S. Bankruptcy Court judge, Sousa said.