In an attempt to cut $1 billion of its $2.23 billion total debt load, and with a "prearranged" plan discussed with its investors, BearingPoint Inc. has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court, Southern District of New York.

According to a statement by Ed Harbach, CEO of the McLean, Virginia-based Technology advisor, the company has urged the court to allow its business to go on uninterrupted, as it had worked out its restructuring plan, and the bankruptcy filing only included its operations in the US.

The filing will enable BearingPoint to substitute its current term loan of nearly $300 million with a new term loan of the same amount. In addition, its left-over $700 million debt of will be swapped with preferred and common stock in the recently restructured company.

As a result, all current shares of BearingPoint will stand canceled, and unsecured lenders would be given common stock. The company's $500 million credit facility would be substituted by the new term loan, coming with an accumulated interest and a $130 million synthetic letter of credit facility.

Reassuring the employees and clients, Harbach reiterated the company's commitment towards exceptional consulting solutions. Harbach added: "This restructuring is an important step to secure a better and stronger future for BearingPoint, and we expect to emerge from this process in an expeditious manner."