GLEACHER & COMPANY, INC.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties.  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.  Such forward-looking statements, including, without limitation, statements regarding the dissolution and liquidation of the Company, the availability, amount or timing of liquidating distributions to stockholders, the adequacy of reserves established to satisfy the Company’s obligations, the belief that a substantial amount of the contingency reserves will ultimately be distributed to the stockholders and the possibility that an alternative, value-creating transaction may be proposed, involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from our expectations of future results, performance or achievements expressed or implied by such forward-looking statements. These risks include the risk that we may incur additional liabilities, that we may have liabilities of which we are not currently aware, that the cost of settlement of our liabilities and contingent obligations could be higher than we expect, that monetization of non-cash assets, including claims we have made or may in the future make against third parties, if any, may take longer and be for amounts that are less than we expect, all of which would impact our ability to make any liquidating distributions to our stockholders.  Although we believe that the expectations reflected in any forward-looking statements are reasonable, we cannot guarantee future events or results. Except as may be required under federal law, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur.

The amount of cash ultimately distributed to the Company’s stockholders in the initial liquidating distribution depends on the accuracy of the assumptions and estimates set forth above and other factors.  The Company attempted to make reasonable estimates and assumptions.  However, if any of such estimates or assumptions are inaccurate, the amount the Company initially distributes to its stockholders may be substantially less than the amount currently estimated. See Part II, Item IA “Risk Factors.”

Based on the foregoing, the Company currently estimates that the aggregate amount ultimately distributed to its stockholders will be in the range of approximately $60 million and $90 million ($9.70 and $14.55 per share), inclusive of the initial liquidating distribution.  The foregoing estimates are not guarantees and they do not reflect the total range of possible outcomes. Stockholders may receive substantially less than the amount of liquidating distributions currently estimated.  The Company is unable to predict the precise amount or timing of any initial or subsequent liquidating distribution.  The timing and amount of any subsequent liquidating distributions will depend upon the actual expenses incurred, the timing of the resolution of matters for which we have established the reserves, the amount to be paid in satisfaction of contingencies, the Company’s ability to convert its remaining non-cash assets to cash and the ultimate amount of proceeds realized upon the monetization of its remaining non-cash assets, including claims the Company has made or may in the future make against third parties and its investment in FATV.  Although the Company’s Board of Directors has not established a firm timetable for the liquidating distributions, subject to contingencies inherent in winding up our business, the Board of Directors intends to make such distributions as promptly as practicable, subject to the requirements of Delaware law.  See Part II, Item IA “Risk Factors.”

We intend to close our stock transfer books and discontinue recording transfers of our common stock at the time we file the Certificate of Dissolution.  Thereafter, record holders of shares of our common stock will not be able to assign or otherwise transfer their shares, except for assignments by will, intestate succession or operation of law, or other transfers permitted under applicable law.  As described more fully within the Company’s proxy materials filed with the Securities and Exchange Commission, persons who hold ownership interests in our shares in book-entry form through DTC and other persons with ownership interests held in “street name” by a broker, bank or other nominee may be able to continue to make transfers of their ownership interests.  Any such transfers could be made only if they do not necessitate a change in the record holder of shares of our common stock.  In addition, following the anticipated delisting from the NASDAQ Global Market, these holders may have difficulty effecting any such transfers, since there can be no assurance that any trading market for such interests will develop or, if a market does develop, that it will afford significant liquidity.

Our common stock is currently registered under the Exchange Act, which requires that we, and our officers and directors with respect to Section 16 of the Exchange Act, comply with certain public reporting and proxy statement requirements thereunder.  Compliance with these requirements is costly and time-consuming. We anticipate that, if our stockholders approve the dissolution and liquidation of the Company pursuant to the Plan of Dissolution, in order to curtail expenses, we will, after the effective date of the filing of the Certificate of Dissolution, seek to terminate our registration under the Exchange Act.  We may not, however, be eligible to do so.  If we are not eligible to deregister, we may seek relief from the SEC from certain reporting requirements under the Exchange Act.  However, the SEC may not grant any such relief, in which case we may be required to continue to bear the expense of complying with all applicable reporting requirements under the Exchange Act.  The costs of compliance with such reporting requirements would reduce the amount which otherwise could be distributed to stockholders.

Once we dissolve, our stockholders will lose the opportunity to participate in opportunities that may have arisen if we were to continue to pursue a strategic transaction.  For example, as a public company with limited operations, we could be the target of a “reverse” acquisition, meaning the acquisition of a public company by a private company in order to bypass the costly and time consuming initial public offering process.  If we implement our Plan of Dissolution, we will no longer be a potential target for a “reverse” acquisition of this type, and our stockholders will not receive any proceeds or interests that they would otherwise have received in such a transaction. It is possible that these opportunities could have proved to be more valuable than the liquidating distributions our stockholders would receive pursuant to the Plan of Dissolution.  If an opportunity were to arise after the filing of the Certificate of Dissolution, but before the cessation of our corporate existence, our Board of Directors may, in its sole discretion, adopt a resolution recommending that the dissolution be revoked and directing that the question of the revocation of our dissolution be submitted to the stockholders for approval.  There can be no assurance either that any such opportunity would arise after we are dissolved that would result in our Board of Directors making such a recommendation or that the stockholders would approve the revocation of our dissolution.