Global Brokerage (f/k/a FXCM) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, case number 17-13532.
The Company, which provides online foreign exchange trading, is represented by Arthur J. Steinberg of King & Spalding. FXCM Group is not involved with the Chapter 11 filing. Concurrent with its Chapter 11 petition, the Company also filed a Prepackaged Plan of Reorganization and related Disclosure Statement (dated November 10, 2017). The overall purpose of the Plan is to enable Global Brokerage to exchange its current convertible notes for new notes that have a five-year extended maturity and to restructure its current operations to reduce current expenses.
The Disclosure Statement notes, “The Plan provides for the following: Issuance of new notes to replace the Existing Notes. The New Notes have a five-year maturity, are secured, will be guaranteed by Holdings, lack a conversion feature, and contain certain additional covenants…; Amendment of the limited liability company agreement of Holdings to provide the Holders of the New Notes with additional contractual protections; Amendment of the limited liability company agreement of FXCM to provide for certain permitted payments to fund certain cash interest payments on the New Notes and to ensure certain funds for anticipated expenses of GLBR; Amendment of that certain Amended and Restated Credit Agreement, dated as of January 25, 2015, by and among Holdings, Leucadia…to extend the maturity of the Leucadia Credit Agreement from January 2018 to January 2019 to enhance the prospects for a refinancing of the facility, mitigating a risk to the ongoing financial viability of FXCM and, in turn, the financial viability of Holdings and GLBR. Third-party releases for parties to the Support Agreement, which were required to induce such parties to grant the concessions provided for in the Plan and the Plan Documents. No impairment of the interests held by equityholders in GLBR.”
According to a corporate release, the bankruptcy case is expected to take no longer than 60 days, and all voting creditors voted in favor of the Plan.
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