20. Restructuring

Investment Banking and Fixed Income Businesses

During the second quarter of 2013, the Company’s Board of Directors approved plans to discontinue operations in its Investment Banking division and Fixed Income businesses. Exiting these businesses impacted approximately 150 employees.

ClearPoint — Homeward Transaction

On February 14, 2013, the Company entered into an agreement to sell substantially all of ClearPoint’s assets to Homeward. This transaction closed on February 22, 2013, and all remaining business activities of ClearPoint have been substantially wound down. Refer to Note 21 herein for additional information.

The following table summarizes the restructuring charges incurred by the Company for the three and six months ended June 30, 2013, which have been recorded as a component of discontinued operations:

	Three Months Ended			Six Months Ended
(In thousands of dollars)	June 30, 2013			June 30, 2013
Cash Charges:
Investment Banking
Severance compensation	$	1,417		$	1,417
Third party vendor contracts and other costs	262			262
Subtotal — Investment Banking (cash charges):	1,679			1,679
Fixed Income businesses
Severance compensation	8,061			8,061
Third party vendor contracts and other costs	5,643			5,643
Subtotal — Fixed Income (cash charges):	13,704			13,704
ClearPoint
Severance and other compensation	—			1,263
Third party vendor contracts and other costs	(48		)	113
Subtotal — ClearPoint (cash charges):	(48		)	1,376
Other
Severance compensation	669			669
Reserve for lease commitments	16,755			16,755
Subtotal — Other (cash charges):	17,424			17,424
Total — Cash Charges:	$	32,759		$	34,183
Non-Cash Charges:
Investment Banking
Intangible asset impairment	$	2,932		$	2,932
Stock-based compensation vesting	254			254
Subtotal — Investment Banking (non-cash charges):	3,186			3,186
Fixed Income businesses
Goodwill & intangible asset impairment	388			388
Stock-based compensation vesting	3,681			3,681
Subtotal — Fixed Income (non-cash charges):	4,069			4,069
ClearPoint
Intangible asset impairment	—			587
Deferred compensation and other charges	—			448
Subtotal — ClearPoint (non-cash charges):	—			1,035
Other
Stock-based compensation vesting	138			138
Impairment of fixed assets and leasehold improvements	3,475			3,475
Subtotal — Other (non-cash charges)	3,613			3,613
Total — Non-Cash Charges:	$	10,868		$	11,903
Restructuring expenses — Total:	$	43,627		$	46,086

The following table summarizes the changes in the Company’s liability related to the restructurings for the six months ended June 30, 2013:

(In thousands of dollars)
Balance — January 1, 2013	$	—
Restructuring expense	46,086
Plus: Deferred rent obligation, prior to restructuring	1,750
Less: Non-cash charges	(11,903		)
Payments for severance and other compensation	(11,091		)
Payments for third party vendor contracts and other costs	(1,200		)
Payments for lease commitments	—
Restructuring reserve — June 30, 2013	$	23,642

The Company’s remaining obligation associated with these exits at June 30, 2013 was approximately $23.6 million and was primarily related to costs associated with lease commitments, and, to a lesser extent, the termination of third party vendor contracts. The Company expects the majority of its remaining liability associated with the termination of third party vendor contracts to be settled by December 31, 2013. The Company’s settlement of its estimated lease commitment obligations is dependent upon finding replacement subtenants or negotiating lease terminations with the respective landlords, the timing of which is currently unknown. The reserve for lease commitments is based upon assumptions including sublease rents per square foot, free rent periods and downtime for locating a subtenant. The Company may incur additional charges that are material to the extent the leases are terminated for amounts in excess of the Company’s estimates, or if finding a subtenant takes longer than estimated and/or actual sublease rents are less than projected. In addition, the Company estimates its remaining severance exposure to be between approximately $0.5 million and $1.0 million in connection with these restructurings. No other material charges are expected to be incurred.