GSC wins OK to sell investment management assets to Black Diamond

By Caroline Salls

Pittsburgh, July 12 - GSC Group, Inc. received court approval to sell substantially all of its investment management business and related assets to Black Diamond Capital Management, LLC, according to a Black Diamond news release.

Upon closing, Black Diamond and affiliated entities will assume active control of a total of $7 billion of GSC's control distressed/private equity, mezzanine, ABS and CLO funds, the release said.

According to the sale motion filed by GSC's Chapter 11 trustee, the assets were sold under two purchase agreements.

The purchase price under the first agreement includes a $224 million credit bid, $5 million cash consideration and $6.7 million promissory note.

Under the second agreement, the balance of the company's pre-bankruptcy loan obligations will be satisfied through the sale of remaining assets, excluding $11.6 million of cash, specified causes of action and life insurance proceeds and specified miscellaneous assets.

The trustee said the excluded assets will be used to ensure that GSC's estates have valuable assets to be liquidated to make distributions to unsecured creditors and pay administrative expenses.

With the closing of the deal, which is expected within 30 days, Black Diamond said it will manage roughly $13.0 billion of assets across its control distressed/private equity, mezzanine hedge fund and CLO vehicles.

Following the closing, Black Diamond said it plans to hire 15 GSC employees to join the Black Diamond team.

"We believe the transaction will benefit Black Diamond and its investors by enhancing investment and back office resources, adding deal sourcing opportunities and expanding capabilities in Europe, amongst other benefits," Black Diamond managing principal Stephen Deckoff said in the release.

Florham Park, N.J.-based investment manager GSC Group filed for bankruptcy on Aug. 31, 2010 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 10-14653.

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