Global Brokerage U.S. Trustee objects to plan releases and payments

By Caroline Salls

Pittsburgh, Jan. 10 – The U.S. Trustee overseeing Global Brokerage, Inc.’s Chapter 11 case objected to the company’s plan of reorganization, raising specific concerns about releases included in the plan, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The U.S. Trustee, William K. Harrington, said in his objection that he “objects to confirmation of the plan to the extent certain provisions do not comply with the Bankruptcy Code and applicable case law.”

Specifically, Harrington said Global Brokerage has not established that some broad releases granted under the plan, “which greatly benefit the non-debtor affiliates,” are fair and equitable.

In addition, the U.S. Trustee said the company has not established that exculpation provisions and third-party releases provided in the proposed plan comply with established precedent.

Harrington also said the plan calls for the priority payment of some professionals who were not retained in accordance with the Bankruptcy Code, as well as for the assumption of an employment agreement with Global Brokerage’s chief executive officer that contains a retentive bonus without satisfying Bankruptcy Code requirements.

Global Brokerage is a New York-based holding company with an indirect effective ownership of FXCM Group, through its equity interest in Global Brokerage Holdings. The company filed bankruptcy on Dec. 11 under Chapter 11 case number 17-13532.

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