September 30, 2016 7:06 PM ET

Commercial Services and Supplies

Company Overview of US Investigations Services, LLC

Company Overview

US Investigations Services, LLC provides screening and security-based information and service solutions to government, law enforcement and first responder, commercial, and litigation support markets. It offers investigation, healthcare fraud, training, security, litigation support, data analytics, and information management and support services. The company also provides adjudication support services, such as background checks and biometric services, as well as customized solutions that help government clients to manage litigation support requirement, record management, and automated information management services. In addition, it offers federal security solutions, healthcare solutions, and...

7799 Leesburg Pike

Suite 1100 North

Falls Church, VA 22043

United States

Founded in 1996

Phone:

703-448-0178

Fax:

703-448-1422

Key Executives for US Investigations Services, LLC

President of Investigative Services Division
Vice President and Deputy General Counsel
Director of Corporate Communications
Vice President of Corporate Development
Corporate Vice President of Financial Planning & Analysis
Compensation as of Fiscal Year 2016.

US Investigations Services, LLC Key Developments

Beasley Allen Secures $30 Million Whistleblower Settlement in USIS Case

Lawyers from Beasley, Allen, Crow, Methvin, Portis & Miles, P.C. helped to secure an agreement in cooperation with the U.S. Department of Justice (DOJ) to settle allegations that private contractor U.S. Investigations Services Inc. (USIS), formerly the Federal Government's provider of security background checks, violated the False Claims Act (FCA). Beasley Allen Principals Larry Golston and W. Daniel "Dee" Miles, III, who is head of the firm's Consumer Fraud section, represented former USIS employee Blake Percival, who filed a whistleblower complaint in 2011. The lawsuit filed by Beasley Allen on behalf of Mr. Percival alleged that USIS knowingly conducted flawed investigations of individuals seeking security clearances. Beginning in at least March 2008 and continuing through at least September 2012, USIS management devised and executed a scheme to deliberately circumvent contractually required quality reviews of completed background investigations in order to increase the company's revenues and profits. According to the allegations, approximately 40% of all USIS security background checks – at least 665,000 in total – involved dumping/flushing and resulted in individuals receiving security clearances for positions for which they were not properly vetted. The DOJ joined the lawsuit in 2013. However, in the spring of 2015, USIS's parent company, Altegrity, filed for bankruptcy, which made it more difficult for the government to recover what the company owed, and for Mr. Percival to receive a whistleblower reward. Under the whistleblower provisions of the False Claims Act, the whistleblower is entitled to receive up to 30% of any money the government recovers. This is both an incentive and a reward for the tremendous sacrifices – both personal and professional – whistleblowers often make by reporting the truth. Recognizing the importance of the case, Golston and Miles fought to continue the litigation, and the Justice Department agreed to remain a part of the case, and ultimately USIS agreed to forego at least $30 million in payments legitimately owed to the company to settle the government's allegations.

Joint Reorganization Plan Approved for Altegrity, Inc.

The US Bankruptcy Court approved the joint plan of reorganization of Altegrity, Inc. on August 14, 2015. The debtor had filed its plan in the Court on March 30, 2015. As per the amended plan, allowed administrative claims, statutory fees of U.S. Trustee, Priority Wage Claims, professional compensation, priority tax claims and reorganizing debtors other priority claims shall be paid in full in cash. Liquidating debtors other priority claims shall receive their pro rata share of distributions in accordance with the payment waterfall. DIP Claims of $90 million shall be paid in cash in full and final satisfaction of the total claim. Secured second lien notes claims shall receive 96.91% of the debtor’s equity along with a pro rata share of the collateral proceeds and secured third lien notes of $5.07 million claims shall receive 1.98% of the debtor’s equity along with a pro rata share of the collateral proceeds. First lien notes claims of $825 million and first lien credit agreement claims shall be reinstated and lien claims shall be paid in full in cash. Liquidating debtors unsecured claims shall receive pro rata share of distributions of proceeds of collateral while reorganizing debtors unsecured claims shall receive pro rata share of the warrants. Operating Debtors Unsecured Notes Claims of $53 million having recovery of 5.4%, will get pro-rata share of new common stock pool of 1.11%. Another new class of Operating Debtors General Unsecured Claims of $10.50 million having recovery of 11.9%, will get pro-rata share of $1.25 million in cash. Second Lien Notes Deficiency Claims of $270.92 will be cancelled. Altegrity, Inc. junior subordinated notes claims shall be cancelled. Reorganizing debtors intercompany claims shall be reinstated. Interests in Altegrity Holding Corp. shall be cancelled while interests in the subsidiary debtors that are reorganizing debtors and interests in the liquidating debtors shall be reinstated. The plan shall be funded cash debtor’s cash in hand, sale of assets, new revolving credit facility and through issuance of new common stock.

Joint Reorganization Plan and Disclosure Statement Filed by Altegrity, Inc.

Altegrity, Inc., along with its affiliates, filed a joint plan of reorganization with related disclosure statement in the US Bankruptcy Court on March 30, 2015. As per the plan filed, allowed administrative claims, statutory fees of U.S. Trustee, professional compensation, priority tax claims and reorganizing debtors other priority claims shall be paid in full in cash. Liquidating debtors other priority claims shall receive their pro rata share of distributions in accordance with the payment waterfall. DIP Claims of $90 million shall be paid in cash in full and final satisfaction of the total claim. Secured second lien notes claims shall receive 98% of the debtor’s equity along with a pro rata share of the collateral proceeds and secured third lien notes claims shall receive 2% of the debtor’s equity along with a pro rata share of the collateral proceeds. First lien notes claims and first lien credit agreement claims shall be reinstated and lien claims shall be paid in full in cash. Liquidating debtors unsecured claims shall receive pro rata share of distributions of proceeds of collateral while reorganizing debtors unsecured claims shall receive pro rata share of the warrants. Altegrity, Inc. junior subordinated notes claims shall be cancelled. Reorganizing debtors intercompany claims shall be reinstated. Interests in Altegrity Holding Corp. shall be cancelled while interests in the subsidiary debtors that are reorganizing debtors and interests in the liquidating debtors shall be reinstated. The plan shall be funded cash debtor’s cash in hand, sale of assets, new revolving credit facility and through issuance of new common stock. The debtor filed revised plan of reorganization and related disclosure statement in the US Bankruptcy Court on May 12, 2015. As per the revised plan, new class of Priority Wage Claims will be paid full in cash. Operating Debtors Secured Second Lien Notes Claims will get pro-rata share of 96.91% of the new common stock and Operating Debtors Secured Third Lien Notes Claims will get 1.98% of the new common stock. Operating Debtors Unsecured Notes Claims of $53 million having recovery of 5.4%, will get pro-rata share of new common stock pool of 1.11%. Another new class of Operating Debtors General Unsecured Claims of $10.50 million having recovery of 11.9%, will get pro-rata share of $1.25 million in cash. Treatment of all the other classes of claims remain same as per the previous plan. The debtor filed a plan of reorganization and related disclosure statement in the US Bankruptcy Court on May 15, 2015. As per the plan filed, Secured Third Lien Notes Claims of $5.07 million will be settled by in exchange for 1.98%. First Lien Notes Claims of $825 million will be reinstated. Operating Debtors Unsecured Notes Claims of $53 million will get equity worth $2.85 million. Secured Third Lien Notes Claims of $5.07 million will get equity worth $5.07 million. Second Lien Notes Deficiency Claims of $270.92 will be cancelled. The treatment of all other claims remains unchanged.

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