Official Seeks To Block GSC President's Bonus

Jun 15 2011 | 2:30am ET

There will be no "golden parachute" for the president of bankrupt hedge fund GSC Group if a federal bankruptcy monitor gets her way.

Tracy Hope Davis has objected to a proposed $1 million bonus for Peter Frank, arguing that it is barred by federal bankruptcy law. Davis said the payment, sought last month by Chapter 11 trustee James Garrity, would be an impermissible "pay to stay" payment—and called the bonus unnecessary, anyway.

Garrity last month praised Frank's "invaluable assistance" and warned that Frank is "critical" to the conclusion of the bankruptcy case. The trustee earlier this month unveiled a plan to sell GSC's assets to hedge fund Black Diamond Capital Management, GSC's biggest creditor.

But Davis alleges that Frank has not received the "bona fide" job offer that would make the payment acceptable. She also questioned the goal set for the payment—the sale of the GSC assets—which she called "easily within the debtors grasp."

"This court has showed a willingness to deny a bonus program under similar circumstances," Davis wrote.

The monitor also blasted the size of proposed payout, noting that it was more than three times as much as Frank's annual salary.

Federal Bankruptcy Court in Manhattan is set to consider the bonus payment today.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.