Sierra Income’s Asset Manager to Delist from NYSE after Medley LLC files for Chapter 11
According to reports this week, Medley LLC filed for Chapter 11 bankruptcy proceedings on July 6, after the close of trading on Wednesday. Consequently, the NYSE started the process to delist and suspend trading of Medley Management (NYSE:MDLY) common stock and Medley LLC notes; its publicly traded notes include Medley LLC notes due 2024 (NYSE:MDLQ) and Medley LLC senior notes due 2026 (NYSE:MDLX).
Medley Management Inc. is the parent company of Medley LLC and several registered investment advisors, according to its website. Medley is an alternative asset management firm “offering yield solutions to retail and institutional investors.” Medley has $2.9 billion of assets under management in one business development company, Sierra Income Corp. and several private investment vehicles.
Sierra is a non-traded business development company that invests primarily in first lien senior secured debt, second lien secured debt and, to a lesser extent, subordinated debt of middle market companies.
In 2019 Medley Management Inc. had plans to merge with Sierra Income Corp. and Medley Capital Corporation (MCC), but last May Sierra announced that its Board of Directors terminated the merger plans.
Sierra noted that changes were due to the relative valuations of the Company, MCC, and MDLY, and the “unpredictable economic conditions resulting from the global health crisis caused by the coronavirus (COVID-19) pandemic, and the uncertainty regarding the parties’ ability to satisfy the conditions to closing in a timely manner,” according to a press release.
The White Law Group has been investigating potential securities claims involving broker dealers who may have unsuitably recommended Sierra Income Corp. to investors. Sierra Income Corp. has seen steep declines in value with a current NAV of $5.28 per share as of March 31, 2021.
Medley Noteholders will reportedly come after holders of secured claims and other priority claims in the list for Medley LLC assets. According to court documents, “each holder of an allowed notes claim will get a pro rata share of the unsecured claims pool which consists of all of the Liquidating Trust Assets after payments of allowed secured claims, allowed administrative expenses, allowed priority claims, and Liquidating Trust expenses.”
For more information on the White Law Group’s investigation of Sierra Income Corp, please see:
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The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois. For more information on the firm, visit www.WhiteSecuritiesLaw.com.