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Introduction

BearingPoint Incorporated was the $3+ billion dollar bankruptcy that no one seemed to notice, probably because of its slow and painful demise. After experiencing incredible year-over-year growth from 1996 through 2000, the highly regarded Professional Services Company BearingPoint Inc. (previously known as KPMG Consulting until 2002) was separated from the protection of KPMG LLP and became a standalone, publicly traded company in February 2001.

Eight years later, BearingPoint Inc. declared bankruptcy and was sold off in pieces for pennies on the revenue dollar.

I worked at KPMG Consulting/BearingPoint Inc. from 1993 through 2008 and was a partner/managing director from 1998 through 2008. During this 15-year period, I was primarily based in the US but served as an Ex-Pat based out of our London Office for the better part of 2004 and 2005. These experiences provide me with a unique perspective on the 30 issues I believe contributed to the ultimate demise and resulting bankruptcy of BearingPoint Incorporated.

I’ve organized this book like a theatrical production with “acts and scenes,” because, in many ways, the IPO of KPMG Consulting and the events that followed were like a play and included some comedy, a little bit of tyranny, lots of drama combined with a few significant twists and turns, but in the end, it became a tragedy, and I was in the orchestra pit for all of it, although I will admit there were times I wished I was in the upper balcony.

I’ve dedicated the better part of the last three years to researching, writing, and rewriting this book. In reality, I actually began on January 2nd, 1993, when I joined KPMG Consulting, so this book has, in many ways, been 30 years in the making and provides a chronological, multi-dimensional view into the slow painful destruction of what was once one of the most respected and thriving professional services organizations in the world.

This book carefully reconstructs the “timeline of events” that led to this demise.

In writing this book, I reviewed and analyzed:

• Every SEC filing (over 1500) for BearingPoint Inc.
• Over 10,000 internal emails
• Over 1,000 internal documents and presentations
• Analyst reviews on BearingPoint
• Articles about BearingPoint and other Professional Services Organizations

In addition, I spoke with former colleagues to clarify my interpretation of events and confirm what I have written, and I would especially like to thank Kim Krzenski for all his efforts in formatting the over 125 tables and figures embedded in this book, along with Bill Johnson for his continued encouragement throughout this process.

Most importantly, I need to thank my wife of 35 years for giving up her “dining room for two years” as I stacked thousands of documents organized chronologically in line with the “Acts and Scenes” of this book while also serving as the “primary reviewer and editor” of the entire book.

All this said, there is “no doubt” that the most interesting insights offered in this book come from the personal journal I kept throughout my entire working career, where I documented the “events of the day,” mostly on the over 1500 flights I was on during my 15 years at KPMG Consulting/BearingPoint. These journal entries that are peppered throughout this book are “verbatim from my journal” and provide the reader with “in the moment, on the ground” insight into what was happening while events were unfolding as well as their impact on the culture of our organization.

It’s important to note that over 50% of this book is derived from information found in our numerous SEC filings, all “publicly available” information, along with comments I’ve added throughout to bring color to what is being stated in these filings as well as other information I came across in reviewing internal documents and emails.

To be clear, this is not a book about a “bankruptcy.” It’s a book about “principles” and what happens when egos are over-empowering, along with the importance of making good, well-informed decisions and the impact of the bad ones.

This book can be read/reviewed in multiple ways. For example, you can:

• Jump to the conclusion – Act V “the Aftermath,” where I’ve prioritized the 30 issues that I believe took down the company, or
• Read the comments along with the other emphasized sections throughout the first IV Acts and then read the analysis of issues, or you can
• Read it all front to back.

This book is really intended to help educate future leaders on the importance of the decisions they make and how every single decision has an impact, making every one of them so important.

At least that’s how it started, but as I continued to write and rewrite, this book became a “labor of love” for all those who fought through some incredibly challenging times and all the promises that were never delivered, particularly for the 131 KPMG Consulting Partners that were considered “accredited investors” in February 2001 when KPMG Consulting became a public company. These 131 were promised so much and, in the end, received so little, while others walked away with so much more.

In closing, I want to be clear—this book was not written and is not intended to be an indictment or to implicate anyone in wrongdoing, because I firmly believe everyone involved, with very few exceptions, did what they believed to be best for the “greater good.” But as is the case with many things in life, it just did not turn out as planned.

The following pages provide the “Insight.” ….