Related Party Transactions

6 Months Ended

Jun. 30, 2011

Related Party Transactions

Related Party Transactions

24. 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 Statements of Operations represents $0.0 million and $1.0 million of fees earned for the three months ended June 30, 2011 and 2010, respectively, and $0.0 million and $1.4 million for the six months ended June 30, 2011 and 2010, respectively, for underwriting and advisory engagements performed for MatlinPatterson or its affiliated persons or entities.

For the three and six months ended June 30, 2011 and 2010, MatlinPatterson paid $0.0 million and $0.1 million, respectively, to Gleacher Securities for brokerage services provided to MatlinPatterson or its affiliated persons or entities.  These revenues are included in Principal transactions in the Consolidated Statements of Operations.

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, which is collateralized by shares of its 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.  The Company does not believe, in any event, that the 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 June 30, 2011 and December 31, 2010 was approximately $1.2 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, 2010, the Company paid approximately $4.9 million of this obligation.  The remaining obligation of $5.1 million as of June 30, 2011 and December 31, 2010, respectively, is recorded as a liability within the Company’s Consolidated Statements of Financial Condition.

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

(In thousands of dollars)	June 30, 2011			December 31, 2010
Receivables from related parties
Former stockholders of Gleacher Partners, Inc.	$	1,239		$	1,305
MatlinPatterson - Investment Banking	68			940
Total Receivables from related parties	$	1,307		$	2,245
Payables to related parties
Former stockholders of Gleacher Partners, Inc.	$	5,019	*	$	4,986	*
Total Payables to related parties	$	5,019		$	4,986

*Represents the present value of the Company’s approximately $5.1 million remaining obligation.