| Topic Name: |
Mitchell Madison |
| Message Name: |
the truth part II |
| Date Posted: |
03/26/2001 |
| In Reply To: |
Where hunters thrive, teamwork and collaboration are always a poor
substitute for opportunism and a flexible compensation system. Or so
might read the epitaph of the Mitchell Madison Group, the meteoric
but short-lived consultancy founded in 1994 by a renegade clan of
former McKinsey consultants. The upstart strategy firm would be sold
five years later to Web services kingpin USWeb/CKS as part of an all-
stock deal, valued at the time at more than $300 million.
"I think it's hard to ask people to work for years and not harvest
[the rewards] if there's a ready opportunity - now, the subsequent
decline in the market is another story - but the USWeb transaction
stands by itself as far as that point in time goes, " says Steiner,
who takes credit for spearheading not one, but two consultancy
insurrections before helping establish MMG, where he served as
managing partner.
Acquired by USWeb/CKS in September 1999, the gooey residue of
Mitchell Madison's past had little time to dry before the firm became
a lesser appendage of the much larger anatomy created by the merger
of USWeb/CKS and Chicago-based consultancy Whittman- Hart - the
combined firm later dubbed marchFIRST.
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It was a merger greeted with a skeptical eye by Wall Street. Whittman-
Hart shares would drop 31 percent to $54 the day the deal was
announced, and ensuing snags, including last month's writeoff of $6.8
billion, have led the firm's shares to plummet to under $2. It's any
stock owner's nightmare, but no group of shareholders now has more at
stake in the aftermath of the stock's spectacular tumble than those
feral but well-heeled consultants formerly of MMG.
When the Hunters Became the Hunted
Exactly one year after the newly minted firm's stock began trading,
MMG LLC, the company responsible for distributing marchFIRST stock to
Mitchell Madison shareholders, has had its board of directors ousted
and its assets handed over to provisional li quidators by order of
the Grand Court of the Cayman Islands.
It's a situation created by marchFIRST's stock's breathtaking
nosedive and the hefty liabilities tallied by a strategy firm that
had been riddled with acrimony. With the limited liability compa-ny
deemed technically insolvent by the Grand Court, former MMG partners
now say that marchFIRST stock would need to be trading at a value
greater than $14 a share for the holding company to cover its current
liabilities.
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