Global Brokerage gets no objections to $1.31m advisory fees plan, as bankruptcy case moves ahead

Maria Nikolova

Global Brokerage got no objections to its plans to pay $1.31 million to Centerview Partners LLC and Vinson & Elkins LLP for the firms’ services provided with regard to the Chapter 11 “restructuring” of the broker.

fxcm

Almost one year has passed since United States regulators published their findings into the business model of FXCM Inc, unleashing a series of events that ultimately led to the filing for Chapter 11 bankruptcy by Global Brokerage Inc (OTCMKTS:GLBR). The bankruptcy plan got the Court approval in January 2018, with the company making concessions with regard to releases and litigation.

The bankruptcy case is now making its way through the Court, with some formal procedures on the agenda. As FinanceFeeds reported last week, Global Brokerage is planning to pay a total of approximately $1.31 million to Centerview Partners LLC and Vinson & Elkins LLP.

The Consenting Noteholders seek payment to Centerview in the amount of $928,379.17 – this is compensation for “the extensive and beneficial services provided by Centerview over the course of their engagement, which materially contributed to the Debtor’s successful prepackaged Chapter 11 Case”. These services include negotiating the key terms of the New Notes and the restructuring on behalf of the Ad Hoc Group in “multiple meetings and calls” with the Debtor, its affiliates Global Brokerage Holdings, LLC, FXCM, their advisors, and Leucadia.

The Consenting Noteholders also seek payment to V&E in the amount of approximately $391,383.31. The V&E fees are set provide compensation for “the extensive and beneficial services provided by V&E over the course of their engagement beginning on June 5, 2017 on behalf of the Ad Hoc Group, which materially contributed to the successful restructuring of the Debtor ultimately accomplished under the Plan”.

Any objections should have been filed by February 1, 2018. In a document filed with the New York Southern Bankruptcy Court on Sunday, February 4, 2018, counsel for the Ad Hoc Group, says that no objections have been received as to the fees. The debtor moves the Court to approve the plan for the fees payment.

While on the topic of expenses, let’s recall that Global Brokerage has secured the Court approval to assume the employment agreement of its CEO Kenneth Grossman. 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 United States Trustee has 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. The Court sided with the broker on this matter.

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