Concerned about your investment in Sierra Income Corp.? Update on May 16, 2019
For more information on how to recover investment losses in Sierra Income Corp., please press play for a short video.
The White Law Group continues to investigate potential securities fraud claims involving FINRA-registered broker-dealers who may have unsuitably recommended Sierra Income Corp. to investors.
On August 9, 2018, Sierra Income Corporation (Sierra) announced that it had entered into a merger agreement with Medley Capital Corporation (MCC, NYSE: MCC), in which MCC would merge with and into Sierra, according to a press announcement.
Shares of MCC will be exchanged for the right to receive 0.805 shares of Sierra common stock. Additionally, in a separate merger agreement, Medley Management, Inc. (MDLY, a publicly-traded asset manager, [NYSE: MDLY] that serves as advisor to MCC and Sierra) will also merge with and into a subsidiary of Sierra.
Shares of MDLY will be exchanged for 0.3836 shares of Sierra common stock, plus cash equal to $3.44 per share, plus prospective special dividends of up to $0.65 per share. A condition of the mergers closing is the listing of Sierra common stock on the NYSE and the Tel Aviv Stock Exchange.
Sierra reportedly would have over $5 billion in assets under management upon the close of the mergers. The prospective mergers are reportedly still pending shareholder approval.
Investors who participated in Sierra’s original offering acquired shares at $10 per share. According to the prospectus, investors paid up-front fees and commissions of nearly 10%, including 7%, in sales commissions and a “dealer-manager fee” of 2.75%.
According to reports, the potential merger has yet to be approved, and not all parties are satisfied with merger agreement. Roumell Asset Management, who reportedly owns approximately 2% of the outstanding shares of MCC, intends to vote against the proposed transaction among Sierra Income Corporation, MCC and Medley Management, or MDLY, according to a press announcement in December.
Sierra Income Corp. Merger Update on August 2, 2019
According to reports on July 30, 2019, Medley Capital Corporation, Sierra Income Corporation, Medley Capital Corporation and Medley Management Inc. have amended their merger agreements after the Delaware Court of Chancery ruled in April that Medley Capital’s directors breached their fiduciary duties in entering into the proposed merger and halted the vote until investors were provided with corrective disclosures on the deal.
As part of the settlement terms, the Sierra/Medley Capital merger agreement now includes a 60-day “go shop” process to solicit alternative transactions to the merger. In addition, a settlement fund was created for eligible class members.
The mergers are subject to approval by stockholders, regulatory approval, other customary closing conditions and third-party consents. The Sierra/Medley Capital merger requires court approval of the stipulation of settlement. The transactions are expected to close in the fourth quarter of 2019.
Secondary Listing as of September 13, 2019
Investors looking to sell BDCs, like Sierra Income Corp., often have difficulty finding a buyer, and can suffer significant losses on the sale.
Central Trade & Transfer, secondary market for private placement investments, recently listed shares of Sierra Income Corp. for $4.50 per share. This may be at a loss to investors, as the original purchase price was $10 per share.
Free Consultation with a Securities Attorney
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If you are concerned about your investment in Sierra Income Corp., the securities attorneys at The White Law Group may be able to help you.
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