CASE STUDIES: DOTCOM DOWNSIZES

A technology company reduced their headcount, and determined that their then current inventory of Sun servers provided overcapacity. They wanted to be released from the remaining 12 months of a 36-month lease obligation, but did not know how to go about it.

As a first step, Liquid Technology gave the company an estimate of revenues to expect for the excess equipment. We then assumed a third-party role and assisted the client in negotiating directly with the leasing company. We negotiated a buyout price of $130,000 - 50% of the total amount they were obligated to pay.

Liquid Technology found a buyer for the equipment who paid $130,000. The company ended up paying nothing of the $260,000 encumbrance.

Co-location Facility Lease

The servers were housed in a co-location facility that had nine months of obligation remaining in the lease agreement - a total of $20,000 per month, with 6 months remaining. When the client tried to negotiate with the leaser, no one returned their phone calls, even with the offer of a payout.

When Liquid Technology took over the project, our staff first removed the equipment from the facility. We then contacted the leaser with legal notification, got a hold of a decision maker at the facility and negotiated a mutually acceptable amount - approximately 1/3 of the remaining obligation.

Instead of owing $250,000, the client ended up paying $6,500, and was left with no excess equipment, no excess real estate, and no headaches.