LECG signals intent to sell tax practice to Grant Thornton in the US

Professional services firm LECG Corporation has announced that it expects to sign an amendment to its credit agreement and to transition two expert practice groups to FTI Consulting, Inc.

The company also signed a letter of intent with Grant Thornton LLP to transition the company’s tax and business consulting groups. Simultaneously, the partners of LECG Partners, LLP, which provide attest services under an alternative practice structure, will continue to provide their professional services with either Grant Thornton LLP or WeiserMazars LLP.

The announced transitions will involve approximately 350 employees in Atlanta, Albany, Cambridge, Chicago, Devon, Harrisburg, Houston, New York, Schaumburg and Washington, DC.

The company continues to negotiate the possible transition of the majority of its remaining practice groups, with the advice of its restructuring advisors.

LECG will initially use the majority of the proceeds from practice group transitions to repay the $27.8 million in principal outstanding under its credit facility. The Company does not believe there will be any value remaining for the common stockholders after taking into account the expected net sale values of these transactions in the aggregate, and the use of the proceeds to fund payments to the Company’s lenders and unsecured creditors. Contractually, the remaining value available to equity holders, if any, would be first allocated to the Company’s outstanding preferred stock.