This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Gleacher at Decision Time

NEW YORK ( TheStreet) -- At Gleacher & Co.'s annual meeting May 23, shareholders in the investment bank founded by Eric Gleacher face a stark choice: liquidate the company or hand control to investment funds that may not have their best interests at heart.

Competing scenarios have been sketched out by New York-based Gleacher's top shareholder, MatlinPatterson Global Advisers LLC, in a proxy statement filed with the Securities and Exchange Commission on Monday.

Those included continuing the wind down of the businesses­ -- Gleacher already ended the last of its trading business when it laid off about 160 staff earlier this year in closing its fixed-income operation -- and making a distribution of the proceeds to stockholders; trying to find a buyer or other business combination; or re-investing the company's cash reserves of about $45 million in opportunities, such as acquiring additional interests in FA

TechnologyVentures LP, its venture capital investment subsidiary. With another investor, Clinton Group Inc., backing out of running its own slate this week, shareholders on May 23 have few options. MatlinPatterson's director slate is all that's left in the running. If shareholders vote for those nominees, they will be betting that one of those MatlinPatterson's three alternatives will provide a better return than the one-third loss their stakes have suffered from Gleacher's 52-week high of 98 cents per share.

If shareholders withhold their approval, MatlinPatterson could still go ahead with their plans, but it might have to come clean about its valuation methods in order to forestall lawsuits.

Despite setting out the alternatives, however, sources on Wall Street believe that MatlinPatterson has only one goal, in line with founder Eric Gleacher, who retains an 11% stake in the company: to liquidate the company.

MatlinPatterson got its stake in Gleacher through an earlier controlling buy-in of Broadpoint Securities Inc., through which Gleacher went public in a reverse merger. But the private investment firm, known primarily for its focus on distressed companies, moved to minority status when the merger went through -- something it wasn't accustomed to, according to some with knowledge of the company.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLCH $1.50 0.00%
AAPL $92.69 -0.59%
FB $119.49 1.43%
GOOG $711.11 1.40%
TSLA $214.93 1.61%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs