Think

Medley Merger: The week of the three-way Medley Group vote has arrived. On Friday April 19, 2019 the ballots at Medley Capital (MCC); Sierra Income (SIC) and Medley Management (MDLY) will be counted and we’ll know if the three will become one under a newly public SIC banner. Or will we ? The chances of yet another postponement of the vote are high. Although the BDC Reporter noted – just last week – that the SBA has caused MCC to promise to redeem all its $135mn in subordinated debentures in short order, no official word has come to investors by dint of an update of the Proxy. Nor have the disclosures required by the Delaware Chancery Court following a lawsuit regarding this vote been made by the Medley defendants. Nor have shareholders been officially updated on the multiple offers made by third parties in recent weeks and the Board’s reaction to them. Speaking of the Board, MCC has lost two of its “independent” directors. Can a BDC even function – legally speaking – with those positions still unfilled ? We don’t know the answer but we may be about to find out.

Medley Merger: The next scheduled vote on the merger of the three Medley Group entities into a public BDC fronted by Sierra Income, which will go from non-traded to public company, is another week away. Nonetheless, we’ll be looking out for developments during this penultimate week. There are still a number of outstanding items for which some resolution is required. Will Medley Capital (MCC) be following the instructions of the Delaware Chancery Court and providing an updated Proxy with a fuller account of how the merger was conceived ? Or has MCC – as indicated in when the judge’s opinion was first published – decided to appeal ? Or ignore ? Also, we wonder what the status is of the proposed transfer of the MCC SBA licenses to Sierra Income. Has the SBA – in charge of such things – decided to give the go ahead, or not ? That’s a major item. Also, the initial deadline for the merger is past. How will an extension be handled ? Also, what’s happening about replacing the “independent” directors and meeting stock exchange rules for corporate governance ? (We’ve written multiple feature articles about these and a multitude of other aspects of this subject. Just type “Medley” into the Search box at the top of the website and see what we mean !)

Medley Redux Redux: Now that the vote on the three way Merger has been postponed for the umpteenth time, we’ll be looking this week for the reasons why the delay has occurred. That may or may not come from Medley Capital (MCC) or Medley Management (MDLY) by way of press release or SEC filing. Or, we might hear from one of the activists as to the why of the situations, or read a court transcript to learn what shareholders – who are mostly playing the role of spectator in this situation – have a right to know.

Medley Mania: This week brings the triple merger vote – postponed multiple times – by the Medley companies on March 29. However, chances are there will be much happening even before the digital ballot boxes are opened. Last week we had the sudden – and shocking – resignation of two of Medley Capital’s (MCC) “independent” directors. That’s caused problems for the BDC which needs a quota of disinterested directors to be publicly listed and to meet SEC regulations. We just don’t know by when MCC has to name replacements, and who they might be. Moreover, what role do “independent” directors play now that the votes are almost cast ? And – throwing one more question into the pot – what about the two remaining “independent” directors at MCC ? Are they happy to stay around or will further resignations be coming ?

Better Late Than Never: The most interesting news of the week will occur on Friday when the shareholders of the three Medley Group related companies finally vote on whether to merge together or not. Of course, the vote has now been twice suspended, apparently due to governmental delays relating to the Federal shut-down. Last week, after the vote was delayed at the last minute, very little was said by the parties involved, except confirmation of the date and times of the votes. Even the BDC Reporter did not have anything new to say, nor do we now. We’ll have much more to say once the votes have occurred, the last of which is scheduled for 11:00 a.m. EST. Then there will be fireworks of one kind or another.