C1 – formerly known as ConvergeOne – files for bankruptcy while getting fresh funding to continue operations.

Dave Raffo, MSP News Editor

April 3, 2024

2 Min Read
C1 bankruptcy coming?
Teacher Photo/Shutterstock

Updated April 4

C1 (formerly ConvergeOne) confirmed it has filed for Chapter 11 bankruptcy and is restructuring its balance sheet with the help of its largest investors.

The prepackaged Chapter 11 filing will allow Bloomington, Minnesota-based C1 to work out a court-approved plan to repay its debt while remaining in business. Prepackaged Chapter 11 filings are designed to help companies emerge quickly from bankruptcy and pay their vendors in full.

C1 issued a press release confirming details that Channel Futures previously reported concerning its debt reduction moves.  C1 said it has entered into an agreement with most of its stakeholders, including its largest investor, private-equity company CVC Capital Partners. Silver Point Capital, and Monarch Alternative Capital are among the others that have committed new equity and debt financing.

The agreement will reduce approximately 80% of debt from the C1 balance sheet and $245 million in new equity commitments, resulting in a significant increase in the company's available liquidity.

“Over the past year, we have been taking actions across the organization to help position C1 for success in the market and harness the full value of 'One C1,'” said C1 CEO Jeffrey Russell. “To support our ongoing efforts and ensure the company has a strong financial foundation for the future, C1 is proactively taking steps to reduce our debt levels, strengthen our overall liquidity profile and, in turn, invest in near-term growth and grow market share."

Related:Executive Promotions to Fuel ConvergeOne Growth

ConvergeOne's Jeffrey Russell

C1 sells IT, communications and collaboration solutions to enterprise customers. Its focus areas include cloud, security and networking.

An S&P Global Ratings report downgraded ConvergeOne last September, claiming it has struggled with industry-wide supply chain problems, higher than expected interest rates and free operating cash flow problems.

Weeks after the S&P downgrade, ConvergeOne hired former Intelisys president John DeLozier as chief revenue officer. ConvergeOne rebranded as C1 in November. At the time, Channel Futures reported the company had 10,000 customers and 5,600 technical certifications held by thousands of engineers.

The restructuring news comes less than two weeks after C1 promoted Meghan Keough to chief marketing officer and Tamara Shaw to chief transformation officer. Also last month, it launched a generative AI-powered assistant called C1 Elly that helps organizations use voice and digital data across applications, freeing them from traditional siloed CRM, ERP and ITSM systems.

Related:ConvergeOne Hires John DeLozier Just Weeks After Sudden Intelisys Departure

C1 lists Avaya, AWS, Cisco, Genesys and Palo Alto Networks as core partners, and Dell, Extreme Networks, Juniper Networks, Microsoft, and Zoom as growth partners.

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About the Author(s)

Dave Raffo

MSP News Editor, Channel Futures

Dave Raffo has written about IT for more than two decades, focusing mainly on data storage, data center infrastructure and public cloud. He was a news editor and editorial director at TechTarget’s storage group for 13 years, news editor for storage-centric Byte and Switch, and a research analyst for Evaluator Group. In addition to covering news and writing in-depth features and columns, Dave has moderated panels at tech conferences. While at TechTarget, Raffo Dave won several American Society of Business Publication Editors (ASBPE) awards for writing and editing, including for column writing.

Raffo covers the managed services industry for Channel Futures. His reporting beat includes the MSPs, key vendors and tech suppliers with managed services programs, platform providers, distributors and all key players in this sector of the market. Dave also works closely on the Channel Futures MSP 501 and our live events.

Raffo has also worked for United Press International, EdTech magazine, Windows Magazine and Data Center Intelligence Group (DCIG) in reporting, editing and research analyst roles.

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