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Medley LLC Liquidating Trust's Motion Pursuant to 11 U.S.C. § 105(a) and Federal Rule of Bankruptcy Procedure 9019 to Approve Settlement with Certain Former Insiders of the Debtor
Hearing scheduled for 3/23/2023 at 01:00 PM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware.
Objections due by 3/8/2023.
None filed.
#629**COMPLAINT TO AVOID AND RECOVER TRANSFERS
http://www.kccllc.net/medley/document/2110526230306000000000001
*COMPLAINT TO AVOID AND RECOVER TRANSFERS
http://www.kccllc.net/medley/document/2110526230303000000000001
25. During the Preference Period, the Debtor made five transfers (each, a “Transfer”and collectively, the “Transfers”) totaling $2,015,986.53 to Defendant
Could be also ZERO (short or even long term)
I dont know what liability side / fees of Trust looks like at this point
It wouldnt surprise me if those "wind-down funds" were fairy dust
So w $2mm add'l ***$3.55? or so "target?"
Dont get me wrong, in no way do i assume these numbers anything more than a rough guess
weren't we expecting ~$2mil 'just' from business winddown? Prior to any liquidating trustee 'extra' actions?
So ***$3.14? $6.7m pre4/30+$6.4m post4/30+$2.3mEvershed =($15.4/5) *1.02
Assuming $1.02 / $5 million payout based on SEC
$1.70-$3.50??? $2mil biz completion. $1-$2mil lawyer withhold/clawback? Then today’s settlement low side vs high side.
????
Can anybody help the slow kids w recovery math?
vpagano, thank you for posting!
Settlement Agreement:
http://www.kccllc.net/medley/document/2110526230222000000000003
Medley Seeks Ch. 11 Block On Final Eversheds Fee Bill
By Carolina Bolado
Law360 (January 24, 2023, 4:13 PM EST) -- A liquidation trustee for bankrupt asset manager Medley LLC asked a Delaware bankruptcy judge on Monday to vacate the final fee application by special counsel Eversheds Sutherland LLP for allegedly misrepresenting...
https://www.law360.com/articles/1568651/medley-seeks-ch-11-block-on-final-eversheds-fee-bill
MOTION TO VACATE ORDER RETAINING, FEE APPLICATION EVERSHEDS SUTHERLAND
http://www.kccllc.net/medley/document/2110526230123000000000002
Latest update as of 11/15 in the NY State court: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=qkoGiXqAUKjcHkEzV9OQ8A==
General Bar Date was 4/30/21 at 5:00 ET
The General Bar Date specifically excludes any claims derived from, or based upon, the 2024 Notes (3) and 2026 Notes (4), or the Notes Indentures (5). Except as otherwise provided herein, the General Bar Date will apply to all claims of any kind that arose, or are deemed to have arisen, prior to March 7, 2021 (the “Petition Date”), the date on which the Debtor commenced its case under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), including, but not limited to administrative expense claims under section 503(b)(9) of the Bankruptcy Code and all claims of setoff or recoupment. For the avoidance of doubt, the General Bar Date established by the Bar Date Order supersedes any prior notice of a different bar date or deadline for filing proofs of claim, whether posted on the Court’s docket or otherwise.
http://www.kccllc.net/medley/document/2110526210326000000000004
..Also interesting that (assuming I'm not misinterpreting anything) Strategic Capital Advisory Services, LLC as of the Claims Register on 10/3/22 had a claim amount of $7,700,000 whereas in the Claims Register filed today it's listed as $3,137,944
So were we able to negotiate the number down and/or invalidate some of the claim -OR- did they get a payment in the amount of $4,562,056 (I find this highly unlikely??)
time will tell...........
Thorne Research newly submitted claim (?) for ~$230k; other than that glad to see the majority of the other claims EXPUNGED & W/D:
https://www.kccllc.net/medley/document/2110526230105000000000001
yes, HUGE thank you for the efforts of the Committee!
Congrats to longs, thanks to committee
i think my assumption is correct(?) class 4 'was' supposed to get ~2% but it seems they were paid ~8% b/c class 3 was awarded $10mil by sec 'for class 3 alone'
???
this seems very odd to me-
"PLEASE TAKE FURTHER NOTICE that on August 29, 2022, the Liquidating
Trustee authorized a distribution of 7.967% to holders of allowed Class 4 General Unsecured
Claims that have not yet received a distribution"
i have to look back at some filings/docs but off the cuff it seems to me that class 4 got paid out at a higher percentage b/c the class 3 received the sec-obtained $10mil(??)
i sure hope i'm wrong....................... need to re-DD....
Notice of Distribution (8/26/22)
http://www.kccllc.net/medley/document/2110526220829000000000001
Source: KCC [Docket 600]
Global Corporate Trust
60 Livingston Avenue
EP-MN-WS1D
Saint Paul, MN 55107
usbank.com
Notice to Holders of:
MEDLEY LLC
6.875% Notes due 2026
(the “6.875% Notes”)
and
7.25% Notes due 2024
(the “7.25% Notes”)
CUSIP Nos.: 58503Y105, 58503Y2041
Escrow CUSIP Nos.: 585ESC015, 585ESC0231
NOTICE OF DISTRIBUTION PURSUANT TO BANKRUPTCY PLAN
Please forward this Notice to beneficial holders.
U.S. Bank National Association serves as trustee (the “Notes Trustee”) under that certain Indenture,
dated as of August 9, 2016 (as amended, restated, modified or supplemented from time to time prior to
the date hereof, the “Indenture”), by and between Medley LLC, as issuer (the “Issuer”), and the Notes
Trustee, pursuant to which the 6.875% Notes and the 7.25% Notes (together, the “Notes”) were issued.
Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the
Indenture, the Plan (as defined below), or the prior notices of the Notes Trustee, as applicable.
As previously advised, on March 7, 2021, the Issuer filed a voluntary petition for reorganization
under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware (the “Court”), under Case No. 21-10526 (the “Bankruptcy Case”).
As further previously advised, on October 18, 2021, the Court entered an order [Docket No. 445]
(the “Confirmation Order”) confirming the Modified Third Amended Combined Disclosure Statement and
Chapter 11 Plan of Medley LLC (as modified, amended, or supplemented from time to time and together
with all exhibits and supplements thereto, the “Plan”) in the Bankruptcy Case.
As further previously advised, pursuant to the Plan and Confirmation Order, on the Effective Date
of the Plan, the Notes were cancelled as debt instruments and Holders of the Notes received pro rata
beneficial interests in the Liquidating Trust established pursuant to the Plan. A copy of the Liquidating
Trust Agreement was filed with the Court as Exhibit A to the Notice of Plan Supplement [Dkt. No. 371].
1The Notes Trustee is not responsible for the selection or use of CUSIP numbers or Escrow CUSIP numbers. They are included in this
notice solely for Holder convenience.
As further previously advised, the Notes are registered to a nominee of the Depository Trust &
Clearing Corporation (“DTC”), and any distributions under the Plan on account of the Class 3 Notes Claims
will be made by the Notes Trustee through DTC based upon the amount of Notes each Holder beneficially
held at the time of cancellation at DTC. All such distributions under the Plan on account of Class 3 Notes
Claims will be made to the Notes Trustee in the first instance and are subject to the prior payment of the
Notes Trustee’s fees and expenses as set forth in the Plan.
Copies of the Confirmation Order, the Plan and Liquidating Trust Agreement can be found at:
http://www.kccllc.net/medley or at https://www.deb.uscourts.gov/. The Notes Trustee makes no
recommendation or representation regarding these websites.
DISTRIBUTION PURSUANT TO BANKRUPTCY PLAN
On August 29, 2022, promptly following its receipt of such funds from the Liquidating Trust, the
Notes Trustee will distribute the aggregate amount of $10,000,000.00 to Holders of Class 3 Notes Claims
through DTC. The distribution represents a distribution of 2,039.23487907 per $1,000 principal amount
of the Notes (the “Allocation Rate”):
CUSIP Escrow CUSIP Notes Outstanding Amount Allocation Rate per $1,000 Rate per Note
58503Y105 585ESC015 2,143,800.00 $4,371,711.73 2,039.23487907 2.03923487907
58503Y204 585ESC023 2,760,000.00 $5,628,288.27 2,039.23487907 2.03923487907
Saccullo Business Consulting, LLC, was appointed as the Liquidating Trustee pursuant to the
Confirmation Order, the Plan, and the Liquidating Trust Agreement. Holders interested in contacting
the Liquidating Trustee can do so by calling (302) 643-9175 or emailing SBC@MedleyLiqTrust.com.
Any questions or inquiries about the Bankruptcy Case or the Liquidating Trust should be directed to
the Liquidating Trustee. The Notes Trustee has no duties under the Plan or the Liquidating Trust
Agreement and has no ongoing role in the Liquidating Trust or the Bankruptcy Case.
The Liquidating Trust is a grantor trust for income tax purposes. Holders are encouraged to
review the Liquidating Trust Agreement in its entirety, and, to the extent necessary, contact their own
tax advisors. The information in this Notice is only intended to be a summary. The Notes Trustee
provides no tax advice. The Notes Trustee further makes no recommendation or representation and
gives no investment or legal advice regarding the Notes, the Indenture, or the Bankruptcy Case, the
Confirmation Order, or the Plan.
Questions concerning this notice should be sent via email to Mr. Ian Bell, Vice President, U.S. Bank
National Association, Global Corporate Trust at ian.bell@usbank.com. Holders with other questions may
contact Bondholder Services at (800) 934-6802, option #7.
The Notes Trustee may conclude that a specific response to particular inquiries from individual
Holders is not consistent with equal and full dissemination of information to all Holders.
U.S. Bank National Association, August 26, 2022
as Notes Trustee
assuming our new, forward-looking payment date is mid-November'ish(?)
"
G. The penalties ordered in Subsections A through C above shall be offset, in the
order set forth in Subsection H below, by the amount of any cash payments made by any of the
Respondents, as described in Subsection E, that are subsequently distributed to bondholders and
documented as set forth in Subsection F within 180 days of entry of this Order. Payment of
attorneys’ fees or any other costs of administering the distribution to bondholders in the
Bankruptcy Case, as well as any costs incurred by the notes indenture trustee in connection with
the Bankruptcy Case, shall not be deemed payment to bondholders of Medley LLC for purposes
of the civil penalty offsets set forth in this Subsection and in Subsection H below.
H. Upon the earlier of 180 days from the date of entry of this Order, or the receipt by
the Commission’s counsel of evidence documenting amounts paid by Respondents and
distributed to bondholders in the Bankruptcy Case in accordance with Subsections E and F
above, the Commission’s counsel shall calculate the amount by which each Respondent’s
penalty may be offset. Such offsets shall be applied in the following manner: 1) the first $4
million shall be credited toward the penalty to be paid by MDLY, set forth in paragraph A.3
above, regardless of which Respondent paid such amount; 2) any amounts greater than $4
million shall be credited two thirds toward the penalty to be paid by Respondent B. Taube, set
forth in paragraph B.3 above, and one third toward the penalty to be paid by Respondent S.
Taube, set forth in paragraph C.3 above.
I. If, upon calculation of the offsets as set forth in Subsection H above, any
Respondent’s civil penalty amount is not offset in full by the payments made and distributed to
bondholders in the Bankruptcy Case, the Commission’s counsel shall notify the Respondent(s) of
the amount(s) not offset. Any Respondent who receives such a notice shall, within 14 days of
receiving the notice, remit to the Commission the outstanding balance of such Respondent’s civil
penalty.
"
timeline possibly reset due to 'other' negotiated monies(?)
"
D. If, at any time up to and including the date 90 days after entry of this Order, one
or more Respondent(s) execute written settlement agreement(s) with the Liquidating Trustee in the Bankruptcy Case providing for such Respondent(s) to make payments for further distribution to bondholders, each such Respondent shall provide a copy of such agreement (each, a “Settlement Agreement”) to the Commission’s counsel in this action. If no such settlement is executed by any Respondent within 90 days from entry of this Order, then each Respondent’s
civil penalty shall become due and shall be paid to the Commission within 14 days of the expiration of such 90-day period.
"
Well beyond Taubes 90-day payment deadline on tpreferreds?
ot:
https://www.fticonsulting.com/about/newsroom/press-releases/fti-consulting-receives-recognitions-global-ma-network-14th-annual-turnaround-atlas-awards
"
Liquidation Award - Chapter 11 Liquidation of the Year
Winner: Medley LLC
-FTI Consulting recognized as advisor to the debtor
"
https://brileyfin.com/blog/b.riley-earns-multiple-turnaround-atlas-awards-in-recognition-of-best-value-creating
"
LIQUIDATION of the YEAR: Medley LLC
B. Riley Securities acted as investment banker to the debtor in its Chapter 11 liquidation, led by Managing Director Adam Rosen.
"
Would have been easier had I just been able to locate the o/s figures for 2024 & 2026 but I spent enough time looking to where I just decided to shortcut it this way.
Tau.bes' 90 day period for the $10mil almost up? If I'm understanding correctly (quick and dirty):
10,000,000 / ((53,600,000+69,000,000) / ((25.25+24.45)/2)) = ~$2.02
Reports detail cash receipts and disbursements.
Using TMST Inc (fka Thornburg Mortgage) as an example, the trustee eventually settled with GS under seal years ago, however no financial impact was reported. I suspect it was sealed not only to protect the settling defendant but also keep the remaining ones in the dark. The settlement has been reported in every subsequent report, just no numbers. If there is some cash received, it has been held in escrow (although it may have been obscurely annotated in a GS 10-Q/10-K. Once the plan has been confirmed, the final outcome will be known.
is cash position not typically disclosed on the interim reports generally speaking?
I guess I was mistaken in thinking that we'd 'at a minimum' see inbound cashflow money from the business wind-down (if not also some payment from the Taubes) in here:
Post-Confirmation Report for Medley LLC for the Quarter Ending June 30, 2022 (Filed by Liquidating Trust)
thanks EI; kind of what i figured but wasn't sure..
Medley Management (now MDLY) and Medley LLC Liquidating Trust are permanently separated.
I would also not expect much, if any, information being shared by MDLY to its outside shareholders.
The Trustee filed a Post-Confirmation Report for Q1. I would expect this to continue. As in the TMST case, I would expect that some information would remain confidential.
will there be a court filing and/or sec filing and/or a pr when the Taubes make payments towards that $10mil i wonder(?)
thanks for the information
thanks! honestly, i haven't been able to find it and gave up as i wasted too much time on it
pacer is easy... the NY state system not so much (unless i'm just doing something wrong)
have a great day!
Yes. The Taubes are on the hook for the $10M. No wiggle room on that.
They negotiated and settled on that amount because I think had they gotten stubborn with the SEC this whole thing could have become criminal ..for them..and they knew it. Had it gone down that road they could have been facing jail time. And if that wasn't bad enough that also meant their days of managing opm would have been over. Guilty verdicts for fraud don't fly so good on Wall St. They were smart to settle ..and imo they got off very easy.
I'm viewing this situation now as separate individuals. The Taubes may not be out of this entirely yet but its possible they are (unless of course more dirt comes to light previously unknown).
I think the focus now for the Trustee is to go after the D&O. Who did what, when and why. He will (or probably already has) drilled down into that unit and knows what the next move is. I think this lawsuit is a delay last ditch side-show. I don't think the Taubes are the ones initiating or pushing it. I could be wrong but I think they want away from any more drama. ??
I'm not where I can read that lawsuit db7.. but I will when I get time.
I thought the Taubes presented this $10mil 'solution' to the SEC(?) Am I correct in that they're on the hook for it BUT trying to recoup some monies to help offset?
The $4mil Medley 'owes' bondholders, where does that come from? Judging from the percentages applied towards the total $10mil owed, it almost seems like in the end the Taubes will technically be on the hook for the full $10mil? Or am I misinterpreting that part?
thanks!
We wondered if the SEC would withdraw their claim once they took care of the Taube bros ..and they did. So they're out.
This is actually good because they can and do cause delays in a BK with minor and or inconsequential objections and such. They have all the time and money in the world so delays are meaningless to them. Delays in bk's always co$t the estate big money in professional fees.
That lawsuit the D&O filed with Lowenstein smacks of a fearful, frantic and desparate last ditch effort to shift blame and delay the process. Not smart imo..but then that's been the problem all along. I think those guys knew the Taube boys were running fast and loose but couldn't control them so as the old saying goes - If you can't beat em' ..join em! They could have resigned when they knew this could be trouble.. but they didn't so its let's see if we can pull somebody else down with us time.
They can run but they can't hide imo.
"NOTICE OF WITHDRAWAL OF CLAIM NUMBER 11
FILED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION
The U.S. Securities and Exchange Commission hereby withdraws proof of claim
number 11, filed in the above-captioned case as a general unsecured claim in an unliquidated
amount, and hereby authorizes Kelley Drye & Warren LLP and Potter Anderson & Corroon
LLP, attorneys for the Medley LLC Liquidating Trust, to file this notice with the Bankruptcy
Court to effect the withdrawal of claim number 11.
Dated: May 11, 2022 "
Medley Management is the plaintiff.
The suit was filed in New York state court.
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