Black Diamond Capital Management LLC won court permission to buy assets of GSC Group Inc., an investment-management firm in bankruptcy.
U.S. Bankruptcy Judge Arthur Gonzalez approved the sale in a decision filed today in Manhattan. A lender group that included UBS AG (UBSN) and Credit Agricole SA (ACA) opposed the sale and sought a separate restructuring of the Florham, New Jersey-based company.
“The debtors extensively marketed the assets” and chose the best bid after an auction, Gonzalez wrote in the order. The bid fully satisfies a $253.5 million senior secured claim, and includes a $6.7 million promissory note and $5 million in cash, according to the court order.
GSC, founded by former Goldman Sachs Group Inc. partner Alfred Eckert III, filed for bankruptcy last year. It had about $8.4 billion of assets under management as of March 2010, according to court papers.
After the bankruptcy filing, GSC agreed to sell its investment-management business to lender Black Diamond. UBS and other lenders fought the deal and persuaded Gonzalez to appoint a trustee to take over the business.
The trustee, James Garrity, then proposed a new deal in which GSC’s assets would be sold to Black Diamond as part of two sale agreements worth about $275 million to GSC, according to court papers.
The sale gives Black Diamond a windfall at the expense of other creditors, the lender group said. It proposed a plan that would have given lenders ownership of GSC.
The case is In re GSC Group Inc., 10-14653, U.S. Bankruptcy Court, Southern District of New York (Manhattan).