“Mr. Manzo, like many senior professional advisors and attorneys, elected to structure his relationship with Capstone through a single-member limited liability company that entered into a contract with Capstone,” the company statement said.

“Despite acknowledging in court filings that here is no evidence that Mr. Manzo's rates were inflated, the United States Trustee contended that, because Mr. Manzo was not a member or employee of Capstone, it was inappropriate for Capstone to pay Mr. Manzo from fees earned in the bankruptcy cases and that his compensation from Capstone had to be disclosed.

Capstone announced that it decided to settle to avoid the cost and disruption of further litigation. Under the agreement, Capstone will reduce its total fees for post-filing work for the GSC Group by $1 million, or approximately 15%.

Capstone agreed to the U.S. Trustee's insistence that it retain the services of a monitor to review its bankruptcy retention and disclosure policies and procedures.

However, the company said is practices were already “among the best in the industry,” prior to the Justice Department investigation, having been developed with the advice of leading law firms.

“Capstone takes seriously its obligations to the courts before which it appears, and welcomes the opportunity to ensure that it continues to make all necessary disclosures,” the company statement said.

Furthermore, Capstone said it had done a very effective job in the GSC case. “While initially offered only $5 million for all the debtors' assets, Capstone managed an auction process that raised more than $235 million in proceeds, and, together with other subsequent asset sales, is expected to generate a meaningful recovery for creditors,” the advisory group stated.