Global Brokerage pre-packaged Chapter 11 plan takes effect

By Caroline Salls

Pittsburgh, Feb. 8 – Global Brokerage, Inc.’s pre-packaged plan of reorganization took effect on Thursday, according to a notice filed with the U.S. Bankruptcy Court for the Southern District of New York.

The plan was confirmed on Jan. 22.

As previously reported, the company reached a debt restructuring agreement with an informal group holding more than 68.5% of its 2.25% convertible notes due 2018.

The restructuring support agreement also includes participation by FXCM Group, LLC, Leucadia National Corp. and LUK-FX Holdings, LLC.

Under the plan, Global Brokerage will extend the maturity of its debt by five years and restructure its operations to reduce expenses.

The company said the plan will result in the convertibles being exchanged for an equal amount of new senior secured notes due five years from Global Brokerage’s emergence from Chapter 11 protection.

The new notes will pay cash interest at 7% and have a payment-in-kind toggle option. They will not be convertible.

The credit agreement with Global Brokerage Holdings, LLC and FXCM Group as borrowers and Leucadia as lender will be extended by 12 months.

Global Brokerage common stock will be unimpaired.

According to the confirmation order, the approved plan includes some changes.

Specifically, a proposed debtor release will not constitute a release of any claims of Global Brokerage against its current or former officers, directors and employees.

In addition, any claim that would otherwise be subject to subordination under section 510(b) of the Bankruptcy Code will be considered a general unsecured claim.

The changes also set guidelines for the payment and reimbursement of the fees and expenses of Vinson & Elkins LLP and Centerview Partners LLC, as advisors to consenting noteholders.

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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