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Business fails to find buyer opts for dissolution

There are multiple reasons why a business might seek a merger or to be purchased by another business. In some cases, businesses based in New Jersey and elsewhere throughout the nation, will explore this option when the business is not doing well. This was the case for a brokerage house located in a neighboring state.

Gleacher & Co. recently announced that it plans to dissolve and liquidate the company. It plans to close next month. The once successful business began its decline approximately four years ago. The decline and subsequent decision to dissolve, is due at least in part to customers suspending trading and salespeople leaving.

Discussions with several financial firms failed to result in a workable deal, resulting in the recent announcement. The company’s chairman indicates that the dissolution and liquidation of the company is in the best interest of the stockholders.

At this point, the initial distribution is expected to pay $3.23 a share and the first round will be approximately $20 million. Other larger distributions would likely follow. Of course before this can occur, shareholders must approve the liquidation.

As is the case with virtually any activity a business engages in it is possible that disputes regarding the dissolution could arise. This could slow the dissolution and liquidation process and ultimately result in the loss of money for many. To try to keep actions like this on track, most businesses rely upon lawyers. Accordingly, it is likely that Gleacher has attorneys hard at work to make sure the dissolution and liquidation process is navigated without major issues.

Source: Bloomberg, “Gleacher to Liquidate After Failing to Find Buyer,” Zeke Faux, March 13, 2014

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