Shearman & Sterling recently obtained Bankruptcy Court approval for a sale of $7 billion in investment assets of money manager GSC Group, Inc. and its affiliates. GSC manages assets in the United States and Europe but filed for chapter 11 protection in early 2010 when it was unable to refinance its debt following the global financial crisis. Shearman & Sterling partner James L. Garrity, Jr. was appointed as Chapter 11 Trustee in January of 2011 in the wake of an aborted sale process that broke down amidst accusations concerning breaches of fiduciary duties and conflicts of interest among GSC’s senior management.
In June of 2011, Garrity proposed a sale of GSC’s assets based on a joint bid from Black Diamond Capital Management, L.L.C. and Black Diamond Commercial Finance, L.L.C., the agent under GSC’s secured credit facility. A group of secured lenders under that facility objected and proposed their own plan of reorganization seeking an alternative disposition of GSC’s assets. After a contested two-day evidentiary hearing before Chief Bankruptcy Judge Arthur J. Gonzalez in the Bankruptcy Court for the Southern District of New York, the proposed sale was approved on July 11, 2011.
In addition to representing Garrity in connection with the negotiation and litigation of the proposed sale, Shearman & Sterling has represented him in several other aspects of GSC’s chapter 11 cases, including in connection with the formulation and approval of an employee bonus program and negotiating a consensual resolution of claims with the U.S. Securities and Exchange Commission.
In addition to Garrity, the Shearman & Sterling team with respect to the sale transaction included partners Andrew Tenzer (New York-Bankruptcy & Reorganization), William Roll, III (New York-Litigation), Roger Baneman (New York-Tax) and Paul Schreiber (New York-Investment Funds); counsel Susan Fennessey (New York-Bankruptcy & Reorganization) and Jesse Kanach (Washington, DC-Investment Funds); and associates Randall Martin (New York-Bankruptcy & Reorganization), Karen Hart (New York-Litigation), Stacey Corr (New York-Bankruptcy & Reorganization), Quentin Wiest (New York-Bankruptcy & Reorganization), Paige Berges (New York-Litigation), Shiu-Kay Hung (New York-Tax), Carmen Wong (New York-Investment Funds) and Michael Shin (New York-Investment Funds).
