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Gleacher & Company Announces Fourth Liquidating Distribution and Provides Other Updates

NEW YORK--(BUSINESS WIRE)--Mar. 2, 2016-- Gleacher & Company, Inc. (OTC Pink: GLCH) (the “Company”) announced today that the Board of Directors has determined to make a fourth liquidating distribution to Company stockholders in the amount of $1.82 per share of the Company's common stock (approximately $11.3 million in the aggregate). The record date for this distribution is March 15, 2016. The Company anticipates that the payment date will be on or about March 22, 2016. Total liquidating distributions, including this fourth distribution, since the filing of the Company’s Certificate of Dissolution in July 2014 amount to $10.37 per share of the Company’s common stock (approximately $64.1 million in the aggregate). The Company intends to continue to monitor its assets and liabilities and to make further liquidating distributions when advisable and consistent with its legal obligations. Given the ongoing nature of this process, the Company has made no determinations with respect to any schedule for future liquidating distributions.

The amounts distributed to stockholders may be affected by many factors, including the resolution of outstanding known claims and obligations of the Company, the incurrence of unexpected or greater-than-expected losses with respect to contingent liabilities, the assertion of claims that are currently unknown to the Company, the Company’s realizations on selling or otherwise monetizing the Company’s FATV interests and its other non-cash assets, the need to dissolve and wind up each of the Company’s subsidiaries, and costs incurred to wind up our business. As a result of these and other factors, stockholders may receive substantially less than anticipated. Under certain circumstances, stockholders may be required to return liquidating distributions and receive nothing from the Company in the dissolution and liquidation.

The Company also announced that it no longer anticipates making publicly available unaudited consolidated financial statements or providing guidance with respect to estimated ranges of aggregate future distributions from the liquidation. Prior estimates should not be considered to be accurate as of any date other than the date such estimates were disclosed. Except as may be required under federal law, the Company undertakes no obligation to update any previously disclosed information for any reason, even if new information becomes available or other events occur.

Below is the Company’s Statement of Net Assets in Liquidation. The amounts reflected in this statement are based on Company estimates, judgments and opinions taking into account facts and circumstances currently known to the Company. There are significant uncertainties that could materially change the Company’s estimates, or affect its judgments or opinions, were they known currently. For example, there is no liquid market for the Company’s investment in the FATV fund or for the portfolio companies in which that fund invests. Monetization of this asset will depend in large part on the performance and condition of this asset and the prevailing market for assets of this type, making the timing and amount of any cash realization highly uncertain. Similarly, the Company’s stated reserves for claims and contingencies are in large part based on estimating losses from claims that have not been, but could be, asserted, requiring assumptions regarding the types of claims that might be made, the likelihood of their having merit and the costs associated with their disposition. The Company’s estimated future cash operating expenses are based on assumptions we have made regarding costs associated with the foregoing matters and other costs associated with winding-down the Company’s operations. Investors should consider these factors carefully when reviewing the Statement of Net Assets in Liquidation and other information we publish.

Statement of Net Assets in Liquidation (Unaudited and Pro Forma)

Set forth below is the Company’s Statement of Net Assets in Liquidation as of June 30, 2015 and December 31, 2015, shown on an actual basis, and as of December 31, 2015, shown on a proforma basis giving effect to the anticipated payment of the fourth liquidating distribution of $1.82 per share (approximately $11.3 million in the aggregate) and the Company’s reduction in reserves for claims and contingencies.

                       
December 31, 2015 June 30, 2015
 
Proforma Proforma, as
(in thousands) Actual Adjustments (1) Adjusted Actual
 
Assets
Cash and cash equivalents (including Escrow) $ 21,240 $ (11,257 ) $ 9,983 $ 47,600
Receivables from:
Indemnification receivable - Related party - - - 363
Management fees and other - Employee Investment Funds ("EIF") 237 - 237 237
Others 91 - 91 276
Investments
FA Technology Ventures L.P. ("FATV") (2) 4,308 - 4,308 5,875
FATV - share of carried interest (2) 2,188 - 2,188 2,854
Employee Investment Funds ("EIF") 1,157 - 1,157 1,260
Income taxes receivable 439 - 439 294
Other assets
Collateral deposits - office leases 61 - 61 411
Others   37   -     37   28
 
Total Assets: $ 29,758 $ (11,257 ) $ 18,501 $ 59,198
 
Liabilities (excluding Liquidation Reserves)
Payables to:
Former employees - EIF $ 801 $ - $ 801 $ 899
Others - - - 48
Accounts payable and accrued expenses 309 - 309 695
Income taxes payable - indemnified by Related party   -   -     -   298
 
Total Liabilities (excluding Liquidation Reserves): $ 1,110 $ -   $ 1,110 $ 1,940
 
Liquidation Reserves
Estimated future cash operating expenses (3) $ 4,382 $ - $ 4,382 $ 5,796
Reserves for claims and contingencies (4)   14,615   (8,830 )   5,785   35,166
 
Total Liquidation Reserves: $ 18,997 $ (8,830 ) $ 10,167 $ 40,962
 
Net Assets (5) $ 9,651 $ (2,427 ) $ 7,224 $ 16,296
 
Common stock - outstanding: 6,185 6,185 6,185

Notes

(1)   Represents fourth liquidating distribution of $1.82 per share and the reduction in reserves for certain claims and contingencies.
 
(2) During the six month period July 1, 2015 through December 31, 2015, the Company collected approximately $0.1 million from FATV escrows and recognized mark-to-mark losses of approximately $2.1 million.
 
(3) During the six month period ended July 1, 2015 through December 31, 2015, the Company paid approximately $1.4 million of operating expenses. There were no changes in estimate for the Company's reserve for future cash operating expenses.
 
(4) Reserves for claims and contingencies at December 31, 2015 (as adjusted) are set aside to provide for potential liabilities and obligations, including those associated with (i) potential losses associated with ClearPoint's former residential mortgage lending business (ii) the SEC/CFTC subpoenas more fully described within the Company's June 30, 2015 financial statements issued on September 28, 2015 (iii) potential tax exposures and (iv) other potential matters.
 
(5) Amounts not indicative of the Company's estimated aggregate potential recovery.

About Gleacher & Company

Gleacher & Company, Inc. is a dissolved corporation under the laws of the State of Delaware.

Forward-looking statements

This press release contains “forward-looking statements.” These statements are not historical facts but instead represent the Company’s belief or plans regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company’s control. The Company’s forward-looking statements involve known and unknown risks, uncertainties and other important factors, including the risks and other factors identified herein, on the Company’s website and in other public disclosures made by the Company from time to time. As a result, the Company’s actual actions, performance or achievements or results may differ materially from those expressed or implied by these forward-looking statements. Forward-looking statements include, without limitation: statements regarding the dissolution and liquidation of the Company, including the Company’s expectations with regard to liquidating distributions. Although the Company believes that the expectations reflected in any forward-looking statements are reasonable, it cannot guarantee future events or results. Except as may be required under federal law, the Company undertakes no obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur.

Source: Gleacher & Company, Inc.

Gleacher & Company, Inc.
Investor Relations
212-273-7100
www.gleacher.com