Court approves Global Brokerage’s Chapter 11 bankruptcy plan with modifications
The plan has been modified to include changes required by plaintiffs in a number of cases against the broker. The objections of the US Trustee, however, are not satisfied in full.
A number of documents, with a total length of nearly 500 pages, have just been filed with the New York Southern Bankruptcy Court – all of these documents relate to the Combined Hearing about the Chapter 11 bankruptcy plan of Global Brokerage Inc (OTCMKTS:GLBR), formerly known as FXCM Inc.
Judge Michael Wiles has signed an order of approval for Global Brokerage’s restructuring plan but the plan included certain modifications made in line with objections against the plan. Let’s recall that these objections were filed by a number of plaintiffs in legal cases against the broker. Such plaintiffs include Brett Kandell and the Retirement Board of the Policemen’s Annuity and Benefit Fund of Chicago. The plan was modified in line with objections raised by these parties.
On the other hand, the US Trustee saw favorable response only to some of his objections. The objections that were satisfied concern the Debtor Release (this will not be a release of any claims of the Debtor against its current or former officers, directors and employees) and exculpation provisions.
Global Brokerage, however, got the Court approval to assume the employment agreement of its CEO Kenneth Grossman. Let’s recall that the Grossman Employment Agreement provides for both an annual salary of $600,000 and a “Completion Bonus” of $1,000,000 payable as a lump sum on July 31, 2018. The Trustee argued that Global Brokerage must show that the Completion Bonus is a “pay for value” plan that offers incentives based on performance rather than a “pay to stay” plan.
Importantly, of course, Global Brokerage got the Court’s approval for issuance of the new notes. The Debtor or Reorganized Debtor, as applicable, is authorized to issue the New Notes. The New Notes shall be, upon execution and delivery, legal, valid, and binding obligations of the Reorganized Debtor, the Court ruled.
Global Brokerage filed its Chapter 11 bankruptcy petition on December 11, 2017. The company has stated that it expects to expedite the restructuring process.
