Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions

Related Party Transactions

NOTE 28. Related Party Transactions

        From time to time, in the ordinary course of its business, the Company provides investment banking services and brokerage services to MatlinPatterson, a significant stockholder of the Company, or its affiliated persons or entities.

        Investment banking revenues from related parties reported in the Consolidated Statement of Operations represents $1.9 million of fees earned for the year ended December 31, 2010 for underwriting and advisory engagements performed for MatlinPatterson or its affiliated persons or entities. There were no revenues from related parties for the years ending December 31, 2012 and 2011.

        In connection with the Company's acquisition of certain assets and assumption of certain liabilities of RangeMark on November 7, 2012, the Company has agreed to pay to the selling parties (who are now current employees), $2.5 million of purchase consideration, payable in four installments commencing on September 30, 2013 through March 31, 2015.

        During the third quarter of 2009, the Company received a Notice of Proposed Tax Adjustments from the New York City Department of Finance for underpayment by Gleacher Partners, LLC of Unincorporated Business Tax. The Company has an off-setting claim against former pre-acquisition Gleacher stockholders for any pre-acquisition tax liabilities. This is substantially collateralized by shares of the Company's common stock held in an escrow account that was established at the closing of the Company's acquisition of Gleacher Partners, Inc. to satisfy any indemnification obligations. During the third quarter of 2010, the Company reduced this indemnification claim by approximately $0.8 million based upon the resolution of certain tax years related to this matter. This amount is recorded within Other expenses within the Consolidated Statement of Operations, with an offsetting tax benefit recorded due to the reduction in the unrecognized tax benefit. During the fourth quarter of 2010, the Company reclaimed approximately $0.7 million of shares of common stock from the escrow account in connection with the resolution of certain tax years in the third quarter of 2010. The Company does not believe, in any event, that the remaining open tax years or other pre-acquisition tax matters will have a material adverse effect on its financial position or results of operations. The Company's receivable for this indemnification claim at December 31, 2012 and 2011 was approximately $1.5 million and $1.3 million, respectively.

        In connection with the acquisition of Gleacher Partners, Inc., the Company agreed to pay $10 million to the selling parties over five years after closing the Transaction, subject to acceleration under certain circumstances. During the year ended December 31, 2012, the Company paid $4.4 million of this obligation ($4.9 million was paid during the year ended December 31, 2010 and no payments were made during the year ended December 31, 2011). The Company's remaining obligation is recorded as a liability within the Company's Consolidated Statements of Financial Condition.

        As further discussed in Note 19, in connection with the Company's acquisition of AmTech (which had comprised our Equities division, now reported as discontinued operations) the Company paid the former stockholders of AmTech, in the first quarter of 2010, approximately $1.4 million and issued approximately 345,000 shares of common stock resulting in an increase of Additional paid-in capital of approximately $1.5 million.

        Details on the amounts receivable from or payable to these various related parties are below:

(In thousands)	December 31, 2012			December 31, 2011
Receivables from related parties
Former stockholders of Gleacher Partners, Inc.	$	1,474		$	1,337
Payables to related parties
Former owners of RangeMark	$	2,350	*	$	—
Former stockholders of Gleacher Partners, Inc.		594			4,939	*
Payables to related parties—total	$	2,944		$	4,939

*

Represents the present value of the Company's approximately $2.5 million obligation to the former owners of RangeMark and $5.0 million remaining obligation to the former stockholders of Gleacher Partners, Inc.