Medley Management (MDLY) Reports Notice of Delisting

Medley Management (NYSE: MDLY) disclosed:

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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