Medley Capital Corporation (NYSE: MCC), a publicly traded business development company, Sierra Income Corporation, a non-traded BDC, and Medley Management Inc. (NYSE: MDLY), have again rescheduled their respective special meetings of shareholders for April 19, 2019 where shareholders will vote on the proposed merger that was announced in August 2018.
The April 19th meetings will take place at the offices of Eversheds Sutherland (US) LLP, which is located at 1114 Avenue of the Americas, 40th Floor, New York, NY 10036.
The Medley Capital special meeting will be held at 9:00 a.m. EST; the Sierra special meeting will be held at 10:00 a.m. EST; and the Medley Management special meeting will be held at 11:00 a.m. EST.
The meetings were originally scheduled for February 8th, but were adjourned and rescheduled for March 8th, according to the company, due to the government shutdown as “key branches of the U.S. government were unable to process, review and/or approve documentation required to close the mergers.” A second and third adjournment resulted in the meetings being rescheduled for March 15th and March 29th, respectively.
As reported by The DI Wire, the Delaware Court of Chancery recently ruled that Medley Capital’s directors breached their fiduciary duties in entering into the proposed merger and Medley was ordered to issue corrective disclosures and halt the merger vote until the disclosures were made and stockholders have had the opportunity to assimilate the information.
At the time of the ruling earlier this month, Medley Capital said that it was considering all available options, including appealing the court’s decision.
Sierra plans to acquire Medley Capital and Medley Management, with Sierra being the surviving company that would be structured as a publicly-traded BDC. Medley Capital and Sierra are both controlled by Medley Management.
Independent proxy advisory firms Glass Lewis & Co. and Institutional Shareholder Services, as well as FrontFour Capital Group LLC, a significant Medley Capital shareholder, recommended that shareholders vote against the proposed merger. Proxy advisory firm Egan-Jones Ratings recommended that shareholders vote for the merger.
In other Medley Capital news, the company recently fell out of compliance with the New York Stock Exchange following the resignation of two independent directors, John Mack and Mark Lerdal.
Medley Capital notified the NYSE that, following the resignations, it only had two independent directors on the board and two audit committee members. Listed companies are required to have a majority of independent directors on the board and a minimum of three members on the audit committee.
Medley said that it is currently searching for qualified candidates to replace Mack and Lerdal and regain compliance with the NYSE as soon as possible.
Shares of MCC closed at $3.11 on Friday, and MDLY shares closed at $3.43.
Medley Capital Corporation is a closed-end, externally managed BDC that trades on the New York Stock Exchange (NYSE: MCC) and the Tel Aviv Stock Exchange (TASE: MCC). The company lends to privately-held middle market companies, primarily through directly originated transactions. As of September 30, 2018, the company’s portfolio had a fair market value of approximately $655.4 million.
Sierra invests primarily in first lien senior secured debt, second lien secured debt and, to a lesser extent, subordinated debt of middle market companies in a broad range of industries with annual revenue between $50 million and $1 billion. The company’s offering launched in April 2012 and has raised nearly $1 billion in total equity capital, as of the third quarter 2018. Sierra oversees a $967.7 million investment portfolio.
Medley Management is an alternative asset management firm with $4.8 billion of assets under management in two business development companies, Medley Capital Corporation and Sierra Income Corporation, Sierra Total Return Fund (NASDAQ: SRNTX), and several private investment vehicles.