Medley Capital Corporation (“MCC”), a business development company (BDC), has filed for Chapter 11 bankruptcy. According to its website, the company is a direct subsidiary of Medley Management Inc., an alternative asset management fund, which currently has $2.9 billion of assets under management in Sierra Income Corporation (“Sierra”). Earlier this year, a planned merger between Sierra and MCC was terminated as a result of unpredictable economic conditions caused by the Coronavirus pandemic.
The national securities and class action law firm Levin Law, P.A. (“Levin Law”) is investigating securities brokerage firms that recommended and sold interests in Medley Capital Corporation to their customers. If you have suffered losses as a result of investing in MCC, Sierra Income Corporation, or another BDC, contact Levin Law immediately for a free consultation.
As we previously discussed in our investigation into Sierra Income Corporation after the company’s suspension of monthly distributions, business development companies are risky, illiquid investments whose portfolios are often made up of unproven, financially distressed companies. A volatile economic environment, like the one caused by COVID-19, can wreak havoc on these companies.
According to publicly available information regarding their bankruptcy filing, MCC’s financial troubles are considerable. Financial data indicates that as of March 2, 2021, the company had a little more than $5.4 million in total assets and total debts of over $140 million.
BDC’s, like Sierra and MCC, provide loans for privately held companies promising high returns to investors. In the case of MCC, loans were provided to non-public, underperforming companies that can struggle during market instability.
For the average investor with low to moderate risk tolerance, BDCs are an unsuitable investment. BDCs have high commission and management fees, making them more expensive than traditional investments and present a considerably higher risk to the investor because of their underlying assets.
If you were recommended and sold interests in Medley Capital Corporation or another BDC and suffered losses, contact Levin Law, P.A. for a free consultation. Call (305) 402-9050 or email email@example.com to speak directly with managing partner Brian Levin. Attorney Levin has recovered millions on behalf of investors throughout the country.
Levin Law is a premier securities and class action law firm. Brian Levin, Levin Law’s founding attorney, has achieved settlements and recoveries of approximately $100,000,000 in assets through securities arbitration and litigation for individual and institutional investors throughout the country and the rest of the world. Levin Law represents retirees, individual investors, high-net-worth investors, ultra-high-net-worth investors, institutions, family offices, trusts, publicly held companies, and others.