The U.S. Trustee Program reached settlements with Capstone Advisory Group LLC and Kaye Scholer LLP in the bankruptcy case of GSC Group, Inc., according to USTP press releases last week. Both settlements are to resolve that both firms failed to make accurate and complete disclosures in the GSC Group bankruptcy. Under the proposed Capstone settlement, the financial adviser will pay $1 million, waive an additional success fee of $2.75 million, adopt policies and procedures approved by an independent monitor to ensure accurate and complete disclosure, including with respect to employment of contractors and conflicts of interest and undergo compliance reviews by the monitor for two years. The proposed Kaye Scholer LLP settlement will have the law firm paying $1.5 million, adopt policies and procedures approved by an independent expert to ensure the accuracy and completeness of disclosure, including checks for conflicts of interest and assurance that attorneys review documents filed in their name, establish a special compliance review committee to certify under penalty of perjury the law firm’s continuing compliance and provide training to its attorneys and other staff to ensure the accuracy and completeness of documents it files in bankruptcy court. The case is In re GSC Group Inc., U.S. Bankruptcy Court, Southern District of New York, No. 10-14653.
