Fall from grace: Alarm biz files for Chapter 11
GLENDALE, Calif. - Less than two years after forming as a new security venture, Alliant Protection Services is in financial trouble and has filed for Chapter 11 bankruptcy protection as it looks for a buyer.
The business was started about two years ago by security industry veteran Tom Rankin, one of the four original founders of Protection One, with more than $26 million in financial backing from Warburg Pincus.
The company appeared to get off to a good start, with a plan to buy small to mid-size alarm companies to build a presence in the West Coast. Deals included Pacific Security Systems in Alameda, Calif. and Royal Systems in Hayward, Calif. By the time the company bought its third business, Digitec Security Service in Glendale, Calif., in mid-2003 it served 18,000 customers.
ItÃ¢â‚¬â„¢s unclear exactly how Alliant Protection Services ran into financial trouble, but several industry sources said one problem was that the companies Alliant bought were never truly integrated and continued to maintain separate operations, resulting in added expenses.
Rankin is no longer with the company. He has been replaced by Gary Kulesza, a turnaround specialist from Cloyses Partners, who is acting as the chief responsible person during bankruptcy proceedings.
Kulesza could not be reached for comment.
According to court documents, Alliant Protection Services owes more than $2.7 million to its 20 largest unsecured claims. The largest unsecured claims are held by companies like MartinÃ¢â‚¬â„¢s Security Depot, ADI, USBX Advisory Services and National Alarm Computer Center.
Its largest secured claim is owed to security finance company Security Leasing Partners. Court documents show that Alliant Protection Services is indebted to SLP in the amount of $12.2 million as a result of a loan provided to the company.
Court documents listed more than 300 creditors, such as Bosch Security Systems, GE Security, AT&T and several local security and fire installation companies.
Alliant Protection Services filed for bankruptcy protection in January.