UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)		March 17, 2003
FORTEL Inc.
(Exact name of registrant as specified in its charter)
California	0-12194		94-2566313
(State or Other Jurisdiction of Incorporation)	(Commission File Number)		(IRS Employer Identification Number)
46832 Lakeview Blvd., Fremont, California		94538-6543
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s telephone number, including area code:		(510) 440-9600
Not applicable
(Former name or former address, if changed since last report)

Item 3. Bankruptcy or Receivership

On March 17, 2003, FORTEL Inc. (the “Registrant,” or the “Company”) filed a voluntary petition for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California, Alameda Division (the “Bankruptcy Court”). The case has been assigned to the Honorable Judge Edward D. Jellen and will be administered under case number 03-41538-J11. The filing is intended to allow Registrant to remain in possession of its assets and properties, and eight of the nine current directors and officers of the Registrant will continue to oversee operation of Registrant’s business as a debtor-in-possession, subject to supervision and orders of the Bankruptcy Court of matters outside the ordinary course of business. The Company intends to proceed with a structured sale of substantially all of its businesses and assets.

A copy of the Registrant’s press release dated March 18, 2003, announcing the bankruptcy filing and the proposed sale of substantially all of its assets to Divestiture Management Corporation (“DivestCap”), an investment firm specializing in acquiring and growing established information technology companies, is attached as Exhibit 99.1 hereto and is hereby incorporated by reference.

Certain statements in this current report are forward-looking, and as such are subject to risks and uncertainties. Such statements include:

• that the filing is intended to allow the Registrant to remain in possession of its assets and properties;

• that eight of the nine current directors and officers of the Registrant will continue to oversee operation of Registrant’s business as a debtor-in-possession, subject to supervision and orders of the Bankruptcy Court of matters outside the ordinary course of business; and

• that the Company intends to proceed with a structured sale of substantially all of its assets.

Risks that may affect whether the expected events occur or whether the Company’s intentions are fulfilled include the risk of future resignations by officers or directors, the risk the Company’s filing may be converted into a proceeding under Chapter 7 of the U.S. Bankruptcy Code, the risk a Chapter 11 trustee may be appointed by the Bankruptcy Court and the risk the sale to DivestCap may not occur due to a failure of a condition of closing to be fulfilled or other reasons.

Item 5. Other Events

On March 21, 2003, Registrant entered into a Purchase and Sale Agreement with DivestCap, whereby DivestCap intends to acquire substantially all of the assets of the Company for approximately $1,353,000 in cash and the assumption of approximately $8,600,000 of the Company’s liabilities. Those assets primarily consist of the Registrant’s software products and the intellectual property rights related thereto. The sale is subject to the approval of the Bankruptcy Court referenced in Item 3 above.

A copy of the Registrant’s press release dated March 18, 2003, announcing the bankruptcy filing and the proposed sale of substantially all of its assets to DivestCap is attached as Exhibit 99.1 hereto and is hereby incorporated by reference.

As a result of the actions taken on March 17, 2003, the Company’s Board of Directors appointed Robert Madrilejo as acting Chief Financial Officer.

Item 7. Financial Statements and Exhibits

The following exhibit is filed herewith:

99.1 Press Release Dated March 18, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FORTEL INC.

Dated: March 26, 2003	By:	/s/ Robert E. Fortelka
		Robert E. Fortelka
		Acting Chief Executive Officer and
		Senior VP, Product Operations

Exhibit 99.1

Assets of FORTEL Inc. to be Acquired by DivestCap Management Corporation

FORTEL Inc. Files Voluntary Chapter 11 to Facilitate Sale

Fremont, California - March 18, 2003 - FORTEL Inc. (OTC PK: FRTL) today announced that it has reached agreement with DivestCap Management Corporation (DivestCap) whereby DivestCap intends to acquire substantially all of the assets of FORTEL Inc for approximately $1.7M in cash and the assumption of approximately $8.6M of FORTEL’s liabilities. DivestCap is an investment firm specializing in acquiring and growing established information technology companies. In order to facilitate the sale, FORTEL Inc voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of California after close of the markets on March 17, 2003. FORTEL will seek approval from the Bankruptcy Court for this transaction.

“By acquiring FORTEL’s assets, DivestCap will enable FORTEL’s customers to continue to derive maximum benefit from SightLine,” said Asa Lanum, President and CEO of FORTEL. “We are pleased that DivestCap understands the value that SightLine provides our customers and will seek to enhance this value with continued service and software support. This transaction is essential to meeting customers’ continuing needs.” FORTEL has a world-class customer base that relies on SightLine to effectively monitor the performance of their mission-critical business applications. Many customers also use the capacity planning and trend analysis capabilities of SightLine to ensure that their systems maintain peak operating efficiencies.

“DivestCap’s commitment is to customer support and industry-leading service level solutions,” remarked Charles Hale, President, DivestCap Management Corporation. “We understand that customer support is key to growth and profitability. We will make customer satisfaction our Number One priority.”

The filing of Chapter 11 is an important step in the process of protecting the value and investment of FORTEL’s customers and to ensure long-term viability of the SightLine product. Until the Bankruptcy Court approves the sale, FORTEL will continue day-to-day operations and provide uninterrupted customer support and service to its customers worldwide.

About FORTEL

FORTEL provides the first real-time performance management solution that assures business end-to-end service-level goals. FORTEL’s SightLine suite is based on analysis and correlation software that has been applied and tuned for more than 15 years in the systems management performance arena by customers in finance and banking, defense management, manufacturing, retail services and government.

FORTEL counts among its customers many of the world’s largest and most well known organizations and enterprises. The Company is headquartered in Fremont, Calif., and can be contacted at (510) 440-9600 or by visiting its web site at (www.fortel.com).

About DivestCap

DivestCap specializes in acquiring and managing information technology companies. With over $100 million in capital and 30 years of investment and operational experience in the computer hardware and software industries, DivestCap has the resources and expertise to build value, enabling each investment to realize its full potential. DivestCap’s mission is to create value for the acquired company’s customers by making customer satisfaction the cornerstone of our management approach. You may find additional information regarding DivestCap at www.divestcap.com.

For More Information Contact:

Robert Fortelka - Acting CEO and SVP, Product Operations Terry Ewing - SVP, Field Operations

FORTEL Inc. FORTEL Inc.

510-440-9600 x 2202 510-440-9600 x 2206

bob.fortelka@fortel.com terry.ewing@fortel.com

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(c) 2003 FORTEL Inc. All rights reserved. FORTEL and SightLine are trademarks of FORTEL Inc. All other product or company names mentioned in this release are trademarks of their respective corporations.

Except for historical information contained in this press release, the foregoing contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated by such forward-looking statements based on a variety of risks and uncertainties, including risks and uncertainties relating to factors such as our ability to achieve the intended benefits of SightLine, the timely and successful development and market acceptance of our products, services and features, our ability to successfully attract and retain customers, our profitability targets and financial metrics, the number, size and duration of contracts, and software prices, activities of competitors, demand for our products, volume of business and general economic conditions. FORTEL is currently not in compliance with the filing requirements of the U.S. Securities and Exchange Commission (the “SEC”) and the risks and uncertainties above include potential adverse consequences relating to FORTEL’s noncompliance with the SEC’s filing requirements and its ability to become compliant with such requirements in the future. The guidance contained in this press release is based on limited information available to the Company today, which is subject to change. Although the guidance provided in this press release may change after today, the Company undertakes no obligation to revise or update these forward-looking statements after today. Further information about potential factors that could affect our financial results is included in our Quarterly Reports on Form 10-Q and most recent Annual Report on Form 10-K/A, which have been filed with the Securities and Exchange Commission.