Monitor Group, a Cambridge consulting firm founded by Harvard Business School professor Michael E. Porter that rose to prominence in the 1980s, filed for bankruptcy protection Wednesday as part of a deal to be acquired by Deloitte Consulting.
Monitor was involved in a controversy last year over the revelation it was paid $3 million a year from 2006 to 2008 to help improve the image of now-deceased Libyan dictator Moammar Khadafy. The firm apologized for the arrangement in 2011, calling it a “major mistake.”
In its Chapter 11 filing, in federal Bankruptcy Court in Delaware, Monitor listed assets and liabilities of between $100 million and $500 million. It reported having between 1,000 and 5,000 creditors, including RBS Citizens Bank, Standard & Poor’s Capital IQ, and various real estate, consulting, and audit firms.
Under the asset purchase agreement, New York-based Deloitte, a major US professional services firm, will take over Monitor’s US practice. Foreign arms of Deloitte will pick up Monitor’s overseas operations, which include offices from Brazil to Saudi Arabia.
Monitor said it has 1,200 employees in 26 offices. Eamonn Kelly, a spokesman for the company, said it expects “most employees” to be offered jobs with Deloitte, and for the Monitor brand to continue. Deloitte did not return calls seeking comment.
Kelly said the Khadafy ordeal was unrelated to the firm’s troubles. “We were facing increasing financial pressure as a stand-alone business,” he said. “The recent economic downturn drove us to evaluate our strategic options.”
Founded in 1983 by Porter and a group of Harvard-linked entrepreneurs, Monitor has specialized in strategy consulting to senior officials of businesses and governments. Porter, who still has a stake in the firm, was unavailable for comment. He has been less involved with the firm in recent years, though just last month he spoke on health care reform for Monitor at a New York event.
In a statement, Michael Canning, a national managing director of Deloitte, said, “We have long admired Monitor for its excellence in strategy consulting and we are excited about the fit and compatibility of our practices.”
Bansi Nagji, president of Monitor, attempted to downplay the dramatic reversal of fortunes for a company that once competed with the likes of big-name consultants such as Bain & Co. and Boston Consulting Group. He called the acquisition by Deloitte “hugely motivating.”