Medley Capital Corporation Losses?

Medley LLC Files Bankruptcy

The investment loss recovery lawyers at Soreide Law Group are reviewing possible investor claims against securities brokers and financial advisors who may have recommended investments in Medley LLC, run by Medley Management Inc. -- an alternative asset management firm. Notably, Medley LLC has filed for bankruptcy and investors might face large losses. Here's more about the issuer and what you could do if you experienced losses.

Who Is Medley Management?

Medley Management Inc. purportedly offered yield solutions to both retail and institutional investors. As of June 2021, Medley has a reported $1,900,000,000 in assets. The company's portfolio includes Sierra Income Corporation (a business development company) and other private investment vehicles. Medley Management has apparently provided more than 400 companies with capital since 2003.

Who Is Medley LLC?

Medley LLC’s aim has reportedly been to generate capital appreciation and current income for investors. It appears Medley is mainly involved in generating loans to small-market and middle-market companies. This is so those private companies are able to make acquisitions, finance their business operations, or otherwise expand their business.

What Happened To Medley?

Notably, Medley LLC filed a Chapter 11 bankruptcy petition in March 2021. At the time, Medley LLC indicated that it had up to $5,400,000 in assets but liabilities of up to $141,000,000.
According to the Third Amended Combined Disclosure Statement and Chapter 11 Plan of Medley LLC, it appears that prior to the bankruptcy, Medley suffered yearly reductions in fee earning assets under management and revenue. This led to liquidity problems which seriously hampered Medley’s ability to continue servicing interest obligations owed on notes. Evidently, in December 2020, Medley brought in B. Riley Securities Inc. as financial advisor and investment banker. Medley hoped B. Riley would help resolve financial problems. But B. Riley could not get a financial restructuring worked out.
Evidently, because of the Chapter 11 proceedings, this constitutes a default on Medley’s 6.875 percent senior notes due 2026 and 7.25 percent senior notes due 2024, among other things. Holders of claims against Medley include those with note claims, general unsecured claims, intercompany claims, and equity interests.
It appears that Medley LLC is aiming to maximize the value of its remaining assets for the benefit of holders of claims. Notably, the company claimed that if its assets are liquidated and its existing contracts are terminated, then this will generate devastating harm and reduce holders’ ability to recover. At this point, the plan is up for a vote by holders of claims in the voting classes. Specifically, the voting deadline is September 24, 2021. A confirmation hearing is expected to occur on October 5, 2021. Supposedly, through the proceedings, the company will continue to operate.

Alternative Investment Risks Possibly Overlooked, Downplayed By Financial Advisors

It appears that investments in Medley were recommended by financial advisors and securities brokers.  Targeted investors included institutional and retail clients seeking larger yields. It is possible that a securities broker or financial advisor made an unsuitable investment recommendation concerning Medley LLC or possibly misrepresented the risks associated with this investment. When a financial professional fails to perform due diligence on both the investments and the specific investor, or they sell unsuitable or misrepresented investments, then any losses or other damages relating to their wrongful actions could be potentially recoverable in a lawsuit.

Have You Experienced Losses By Investing In Medley LLC, Medley Capital Corporation?

Have you experienced losses by investing in Medley LLC or Medley Capital Corporation because of your financial advisor or securities broker? If you have, get in touch with Soreide Law Group at (888) 760-6552 and speak with an experienced securities lawyer concerning a possible recovery of your investment losses. Soreide Law Group represents clients on a contingency fee basis and advances all costs. The law firm has recovered compensation for hundreds of US investors who lost money because of their securities brokers and financial advisors.