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EX-99 - EXHIBIT 99.1 - PhenixFIN Corpstipulationandproposedorder.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 8, 2020
 
Medley Capital Corporation
(Exact Name of Registrant as Specified in its Charter)
 
 
 
 
Delaware
 
 
1-35040
 
(State or other jurisdiction of incorporation)
 
27-4576073
(Commission File Number)
 
 
 
(I.R.S. Employer Identification No.)
280 Park Avenue, 6th Floor East
New York, NY 10017
(Address of Principal Executive Offices and Zip Code)
Registrant’s telephone number, including area code: (212) 759-0777
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.001 per share
 
MCC
 
The New York Stock Exchange
6.500% Notes due 2021
 
MCX
 
The New York Stock Exchange
6.125% Notes due 2023
 
MCV
 
The New York Stock Exchange
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 





¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 8.01    Other Events.

On January 25, 2019, two purported class action complaints were filed against Medley Capital Corporation (the “Company”), Brook Taube, Seth Taube, Jeffrey Tonkel, Arthur S. Ainsberg, Karin Hirtler-Garvey, John E. Mack, Mark Lerdal, Richard T. Allorto, Jr., Medley Management Inc. (“MDLY”), Sierra Income Corporation (“Sierra”), and Sierra Management, Inc. in the Supreme Court of the State of New York, County of New York (the “Court”) . The complaints were captioned Helene Lax v. Brook Taube, et al., Index No. 650503/2019, and Richard Dicristino, et al. v. Brook Taube, et al., Index No. 650510/2019 (together with the Lax Action, the “New York Actions”). The complaints in each of the New York Actions alleged that the individuals named as defendants breached their fiduciary duties in connection with the proposed merger of the Company with and into Sierra, and that the other defendants aided and abetted those alleged breaches of fiduciary duties. Compensatory damages in unspecified amounts were sought.

On December 20, 2019, the Delaware Court of Chancery entered an Order and Final Judgment approving the settlement of another purported stockholder class action that was commenced in the Court of Chancery of the State of Delaware by FrontFour Capital Group LLC and FrontFour Master Fund, Ltd., captioned as FrontFour Capital Group LLC, et al. v. Brook Taube et al., Case No. 2019-0100 (the “Delaware Action”) against defendants Brook Taube, Seth Taube, Jeffrey Tonkel, Mark Lerdal, Karin Hirtler-Garvey, John E. Mack, Arthur S. Ainsberg, MDLY, Sierra, the Company, MCC Advisors, Medley Group LLC, and Medley LLC.

The plaintiffs in the New York Actions have acknowledged that the settlement of the Delaware Action rendered the New York Actions moot; however, the attorneys for the plaintiffs in the New York Actions have asserted that they have the right to seek an order awarding them fees and recovery of expenses on account of their purported contributions to the settlement of the Delaware Action.






Following a period of negotiations, the Company has reached an agreement with the respective plaintiffs to resolve the New York Actions. While the Company continues to believe that the allegations in the New York Actions are without merit, to avoid the nuisance, potential expense, burden and delay due to continued litigation, the Company has agreed to pay $50,000 in attorneys’ fees and expenses to plaintiffs’ counsel in connection with the mooted claims asserted. This amount will be covered by the Company’s insurance carrier.

Settlement of the New York Actions is expressly not to be construed as an admission of wrongdoing, fault or liability by any defendant. The defendants have vigorously denied, and continue to vigorously deny, any wrongdoing or liability with respect to the facts and claims asserted, or which could have been asserted, in the New York Actions, including that they have committed any violations of law or breach of fiduciary duty, aided and abetted any violations of law or breaches of fiduciary duty, acted improperly in any way or have any liability or owe any damages of any kind to the plaintiff or to the purported class.

A copy of the Stipulation and [Proposed] Order dismissing the New York Actions is attached hereto as Exhibit 99.1.

Item 9.01     Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits.

Exhibit No.
 
Description
 
 
 
99.1
 





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 8, 2020
 
MEDLEY CAPITAL CORPORATION
 
 
 
 
By:
/s/ Richard T. Allorto, Jr.
 
Name:
Richard T. Allorto, Jr.
 
Title:
Chief Financial Officer