Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or Standard; Transfer of Listing.
On July 6, 2021, Medley Management, Inc. ("MDLY") was notified by the New York
Stock Exchange ("NYSE") that the staff of NYSE Regulation, Inc. ("NYSE
Regulation") (i) intended to implement a halt in trading of MDLY's Class A
Common Stock (the "Common Stock") and Medley LLC's debt securities (the
"Notes") in anticipation of pending material news and (ii) then subsequently
determined to commence proceedings to delist and immediately suspend the Common
Stock and the Notes from the NYSE on July 7, 2021 in view of the filing of the
Combined Disclosure Statement and Plan (as defined below) with the United States
Bankruptcy Court for the District of Delaware.
Item 8.01. Other Events.
Medley LLC Subsidiary Proposed Combined Disclosure Statement and Plan
On July 6, 2021, Medley LLC, in its voluntary case (the "Chapter 11 Case") under
chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court") (captioned In re: Medley LLC, Case No. 21-10526 (KBO)), filed with the
Bankruptcy court a proposed Combined Disclosure Statement and Chapter 11 Plan of
Reorganization and Wind-Down of Medley LLC (the "Combined Disclosure Statement
and Plan"). In connection with the Chapter 11 Case, Medley LLC intends to seek
the Bankruptcy Court's approval and confirmation of the Combined Disclosure
Statement and Plan. There can be no assurances that Medley LLC will obtain the
Bankruptcy Court's approval and/or confirmation of the Combined Disclosure
Statement and Plan, or that if the Combined Disclosure Statement and Plan is
approved, that the reorganization and wind-down of Medley LLC will be
successfully implemented as contemplated by the Combined Disclosure Statement
and Plan (including the treatment of stakeholders described below). This Current
Report on Form 8-K is not a solicitation of votes to accept or reject the
Combined Disclosure Statement and Plan or an offer to sell or exchange
securities of Medley LLC or MDLY. Any solicitation of votes or offer to sell or
exchange or solicitation of an offer to buy or exchange any securities of Medley
LLC or MDLY will be made only pursuant to and in accordance with the Combined
Disclosure Statement and Plan following approval by the Bankruptcy Court.
Capitalized terms used in this Item 8.01 under this heading titled "Proposed
Combined Disclosure Statement and Plan" but not otherwise defined herein shall
have the respective meanings given to such terms in the Combined Disclosure
Statement and Plan.
Summary of stakeholder treatment under Medley LLC's proposed Combined Disclosure
Statement and Plan:
? Secured Claims. Each holder of an Allowed Secured Claim shall receive, at the
option of the Debtor and in its sole discretion: (i) payment in full in Cash of
its Allowed Secured Claim; (ii) the collateral securing its Allowed Secured
Claim; (iii) Reinstatement of its Allowed Secured Claim; or (iv) such other
treatment rendering its Allowed Secured Claim Unimpaired in accordance with
section 1124 of the Bankruptcy Code.
? Other Priority Claims. Each holder of an Allowed Other Priority Claim shall
receive treatment in a manner consistent with section 1129(a)(9) of the
Bankruptcy Code.
? Notes Claims. Each holder of an Allowed Notes Claim shall receive a pro rata
share of the Unsecured Claims Pool. "Unsecured Claims Pool" means all of the
Liquidating Trust Assets after payment of all (i) Allowed Secured Claims, (ii)
Allowed Administrative Expenses, (iii) Allowed Priority Claims, (iv)
Liquidating Trust Expenses, and the proceeds therefrom. "Liquidating Trust
Assets" means (a) the Debtor's Cash, (b) the Causes of Action and their
proceeds, (c) all net proceeds from the Remaining Company Contracts, after
payment of all costs of Medley Capital and costs necessary for the continued
limited operation of the Reorganized Debtor, (d) the MDLY Tax Refund, (e) one
percent (1%) of the Debtor's equity interests, solely for the purpose of
conferring standing upon the Liquidating Trustee to institute Liquidating Trust
Litigation Claims pursuant to the provisions of the Delaware Limited Liability
Company Act (the "LLC Act"), and (e) any Records relating to the foregoing.
Notwithstanding the foregoing, the Liquidating Trust Assets shall not include
the Debtor's equity interests in any non-debtor Affiliate, which shall be
assets of the Reorganized Debtor. "Liquidating Trust Expenses" means all
reasonable and necessary fees, costs and expenses of the Liquidating Trusts, as
determined in the reasonable discretion of the Liquidating Trustee in his or
her business judgment, including but not limited to retained professionals of
the Liquidating Trust and the Reorganized Debtor.
? General Unsecured Claims. Each holder of an Allowed General Unsecured Claim
shall receive a pro rata share of the Unsecured Claims Pool
? Intercompany Claims. Each Allowed Intercompany Claim shall be canceled,
released, and extinguished, and without any distribution, at the Debtor's
election and in its sole discretion.
? Interests. Each holder of an Interest shall retain such Interest, except that,
as set forth in Section VII.F of the Combined Disclosure Statement and Plan, on
the Effective Date, the Debtor shall issue and transfer a 1% membership
interest in the Debtor to the Liquidating Trust; provided that any economic
rights related to the Interests shall transfer and vest in the Liquidation
Trust and be included in the Unsecured Claims Pool. Further, nothing in the
Combined Disclosure Statement and Plan shall amend or alter the Fifth Amended
and Restated Limited Liability Agreement, which, among other things, provide
that the business, property and affairs of the Debtor shall be managed under
the sole, absolute and exclusive direction of the Michelle Dreyer as the
Debtor's Independent Manager. Further, Ms. Dreyer's authority as Independent
Manager may not be amended or modified absent an Order of the Court for good
cause shown, after notice of no less than twenty-eight (28) days and an
opportunity for hearing.
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A copy of the Combined Disclosure Statement and Plan is furnished as Exhibit
99.1 and is incorporated herein by reference. The above description of the
Combined Disclosure Statement and Plan is a summary only and is qualified in its
entirety by reference to the full text of the Combined Disclosure Statement and
Plan.
Cautionary Notice Regarding Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements include, but are not limited to, statements regarding Medley LLC's
intention to seek the Bankruptcy Court's approval and confirmation of the
Combined Disclosure Statement and Plan, the intended reorganization of Medley
LLC as contemplated by the Plan, and other statements containing the words
"believes," "anticipates," "plans," "expects," "will" and similar expressions.
Such forward-looking statements represent management's current expectations and
are inherently uncertain. There are a number of important factors that could
materially impact the value of MDLY's and Medley LLC's securities or cause
actual results to differ materially from those indicated by such forward-looking
statements. These important factors include, but are not limited to, (i) Medley
LLC's ability to obtain the Bankruptcy Court's approval and confirmation of the
Combined Disclosure Statement and Plan, including the treatment of the claims of
Medley LLC's noteholders and other creditors, among others, (ii) Medley LLC's
ability to obtain approval by the Bankruptcy Court of motions in the Chapter 11
Case, the Bankruptcy Court's other rulings in the Chapter 11 Case, and the
outcome of the Chapter 11 Case in general, (iii) the effects of the Chapter 11
Case on MDLY's and Medley LLC's businesses and the interests of various
constituents and stakeholders, (iv) the length of time Medley LLC will operate
under Chapter 11 protection, and the risks associated with potential disruptions
to the business, (v) risks associated with third-party motions in the Chapter 11
Case, which may interfere with Medley LLC's ability to develop and consummate
the Plan or any other plan of reorganization, (vi) the potential adverse effects
of the Chapter 11 Case on MDLY's and Medley LLC's liquidity, results of
operations or business prospects, (vii) the ability to execute on MDLY's and
Medley LLC's business and restructuring plans, (viii) increased legal and
advisor costs related to the Chapter 11 Case and other litigation and the
inherent risks involved in a bankruptcy process, (ix) the consequences of the
acceleration of Medley LLC's debt obligations, (x) the trading price and
volatility of MDLY's Class A Common Stock, and the trading price and volatility
of Medley LLC's 7.25% senior notes due 2024 and 6.875% senior notes due 2026,
and the related ability to remain listed on the NYSE, and the effect of the halt
of trading by the NYSE of MDLY's Class A Common Stock and Medley LLC's senior
notes, and (xi) uncertainties associated with the impact from the ongoing
COVID-19 pandemic, (xii) uncertainties and risks associated with the outcome of,
and timeframe for, the Securities and Exchange Commission investigation
previously disclosed, and (xiii) other factors disclosed by MDLY and Medley LLC
from time to time in their respective filings with the Securities and Exchange
Commission, including those discussed under the caption "Risk Factors" in Part
I. Item 1A of MDLY's and Medley LLC's Annual Reports on Form 10-K for the fiscal
year ended December 31, 2020, in MDLY's and Medley LLC's Quarterly Reports on
Form 10-Q and in MDLY's and Medley LLC's other reports and filings with the
Securities and Exchange Commission. These important factors, among others, could
cause actual results to differ materially from those indicated by
forward-looking statements made herein and presented elsewhere by management
from time to time. Any such forward-looking statements represent management's
estimates as of the date of this Current Report on Form 8-K. While MDLY or
Medley LLC may elect to update such forward-looking statements at some point in
the future, MDLY and Medley LLC disclaim any obligation to do so, even if
subsequent events cause their views to change. These forward-looking statements
should not be relied upon as representing MDLY's or Medley LLC's views as of any
date subsequent to the date of this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Proposed Combined Disclosure Statement and Chapter 11 Plan of
Reorganization and Wind-Down of Medley LLC
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