Global Brokerage’s Chapter 11 “restructuring” results in $1.31m in advisory fees

Maria Nikolova

Global Brokerage aims 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.

Meetings and calls involving Global Brokerage Inc (OTCMKTS:GLBR), formerly known as FXCM Inc, its affiliates Global Brokerage Holdings, LLC (“Holdings”), FXCM Group, LLC (“FXCM”), their advisors, LUK-FX Holdings, LLC and its parent Leucadia National Corp. (NYSE:LUK) have added to the expenses associated with Global Brokerage’s Chapter 11 reorganization. To be more precise, Global Brokerage aims to pay a total of more than $1.31 million in advisory fees to Centerview Partners LLC and Vinson & Elkins LLP.

Under the Chapter 11 plan, which has been approved by the Court albeit with certain modifications, the Reorganized Debtor will assume all obligations of Global Brokerage under the Restructuring Support Agreement, including the Debtor’s obligation to pay fees and expenses under a letter agreement dated May 18, 2017 by and among Global Brokerage and Centerview Partners LLC, a letter agreement dated June 5, 2017 by and among the Debtor and Vinson & Elkins LLP.

Under the Fee Letters, Global Brokerage agreed to pay the fees and expenses of the advisors to a group of holders of the Existing Notes (the “Ad Hoc Group”).

In addition, the Consenting Noteholders seek payment by the Debtor or Reorganized Debtor of extra fees and expenses in accordance with the fee letters.

In accordance with the Centerview Fee Letter, the Consenting Noteholders seek payment to Centerview in the amount of $928,379.17. The Centerview fees are set to provide 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 fees are also set to cover Centerview’s engaging in “extensive back and forth negotiations” of the commercial terms of the Restructuring Support Agreement and the Plan with the Debtor, its advisors, and other key parties-in-interest.

According to Global Brokerage, these negotiations involved “many complex issues”, such as requirements regarding the upstreaming of cash from FXCM, the treatment of interest on the New Notes, the grant of security to secure the Debtor’s obligations under the New Notes, the development of the Noteholder Protections”.

Regarding the V&E Fee Letter, the Consenting Noteholders 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”.

The documents filed with the New York Southern Bankruptcy Court state that any objection to the reasonableness of the Centerview Fees or the V&E Fees shall be filed on or before February 1, 2018.

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