A possible alternative to a liquidation emerged this week. Activist hedge fund Clinton Group withdrew its nominees and threw its support behind MatlinPatterson's eight-person slate. But in so doing, Clinton Group also revealed the reason it had backed out: it had been rebuffed by Gleacher's largest shareholders after it offered to buy a bigger block of shares than its previously held 7.7%.

While the letter didn't reveal what price Clinton Group had offered, people familiar with the situation say it was close to the $1 per share that Clinton said should be the floor for what the company is worth. And although the hedge fund also didn't disclose who it approached or how many shares it wanted, sources said Clinton Group was trying to buy most of the top three holders' shares, that of MatlinPatterson with its nearly 29% stake, Eric Gleacher, and the third-biggest shareholder, Mendon Capital, which has almost an 8.2% stake.

At Gleacher's closing price of 70 cents per share on May 10, the last trading day before Clinton Group threw in the towel on the proxy fight, Clinton Group would have spent about $42 million to gain a nearly 49% stake in the company. And that means that the three top investors turned down a premium of about 43%.

The move could signal to shareholders voting May 23 what price they should be looking for if any of the MatlinPatterson alternatives are put into effect.

MatlinPatterson and Eric Gleacher couldn't be reached for comment. Gleacher CEO Tom Hughes declined to comment, except to note about the past attempts to sell the company: "Gleacher, not unlike any other company which has a very large shareholder, needs the support of that shareholder to get any deal done."

Written by Paula Schaap in New York

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