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  ADL has filed for bankruptcy protection as part of a deal to sell the firm to a sister company of its principal creditor Cerberus Capital Management (ADL Acquisition Co.
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The agreed deal is for $71m. About $64m of the proceeds will pay off ADL's debt to Cerberus Capital Management – who as the consultancy's principal lender provided ADL with a high-interest bridging loan. Cerberus are essentially seeking to write off ADL's debts in exchange for full ownership of the firm. There could still be another twist however…

ADL is entering Chapter 11 under section 363 of the bankruptcy protection code, which gives other interested parties 45 days to submit counter bids. At the end of the 45 day period the courts will decide whether any such bids should be accepted in preference to the Cerberus offer. So Arthur D Little could still be acquired by a competitor.

For the past three years, ADL's annual gross revenues have been circa $500 million. However during recent years, it has funded several major initiatives, most significantly the planned spin-off and public offering of its telecom consulting venture, c-quential, which was withdrawn in late 2000 due to market conditions.

Pamela McNamara, ADL's chief executive, resigned with immediate effect as both head of the firm and as an employee. Her replacement is Richard Sebastiao, a company-restructuring specialist. McNamara will stay on as a member of the board.
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