Sierra Income Corp. Investment Losses, *Updated* August 25, 2021

Sierra Income Corp. NAV continues to Decline – *UPDATED POST* August 25, 2021 

Unfortunately for investors, the Sierra Income’s net asset value has continued to decline since 2016. As of December 31, 2020, the new NAV is reportedly $5.12 per share, an approximate 50% drop in value from the original price of $10 per share, according to a 10-K filing.

The White Law Group continues to investigate securities claims involving Sierra Income Corporation and the liability brokerage firms may have for recommending it to investors.  

Merger News

On April 23, 2020, Medley Management Inc. (NYSE: MDLY), the publicly traded manager of Sierra Income Corporation and Medley Capital Corporation (NYSE: MCC), announced that it had received written notice from the New York Stock Exchange that its average market capitalization over a consecutive 30-day trading period was less than $50 million at the same time that its stockholders’ equity is less than $50 million, in addition to is common stock closing price trading below $1.00 per share for 30 consecutive trading days, this could result in a delisting of the stock from the NYSE. MCC  has also reportedly received a notice from the New York Stock Exchange that its average daily common stock closing price was below $1.00 per share for 30 consecutive trading days, and was out of compliance with NYSE’s continued listing standard rules.  

According to reports, MCC notified the NYSE that it intends to cure the non-compliance through a reverse stock split.  MCC noted that it will propose a reverse stock split to its stockholders for approval at its 2020 annual meeting.  MCC has six months to regain compliance with the minimum share price requirements or it will not be permitted to be listed on the NYSE.

MCC and MDLY are parties to a proposed merger with Sierra Income Corp. first announced in August 2018, and amended in July 2019.   According to FactRight, an alternative investment due diligence firm, “there is no indication that the consideration related to the proposed mergers of Sierra Income Corp., MCC and  MDLY will be adjusted in light of recent market volatility.  MCC shares closed at $2.76 on July 29, 2019 (the date of the amended merger agreement announcement) and closed at $0.59 on April 16, 2020.  Similarly, MDLY shares closed at $3.12 on July 29, 2019, and closed at $0.52 on April 23, 2020.”

August 5, 2020 – Distributions Remain Suspended

According to new filings with the SEC, the board of Sierra Income Corporation, has announced it is electing to extend the suspension of distributions through September 30, 2020. The BDC noted that the distribution suspension includes both cash and the distribution reinvestment plan and would “enhance financial flexibility.” Sierra claims the suspension is in the best interest of the shareholders “during this volatile economic environment.” The company reportedly expects to evaluate resuming monthly distributions at a future date.

“The company believes that it is in the best long-term interests of its shareholders to maintain a conservative approach to its distribution policy during this volatile economic environment,” Sierra said in a statement.

Sierra Suspends Distributions Due to Covid-19

According to filing with the SEC this week, the board of Sierra Income Corporation has reportedly suspended monthly distributions, indicating that the suspension is temporary. Shareholder distributions, including both cash and through the distribution reinvestment plan, will be suspended beginning with the month ending April 30, 2020.

Secondary Sales Price – $2.25 per share

Further, shares of Sierra Income Corp have recently sold on Central Trade and Transfer, a secondary market for alternative investments, for just $2.25 per share. 

The White Law Group continues to investigate potential claims involving broker dealers who may have unsuitably recommended high risk Business Development companies (BDCs) such as Sierra Income Corporation to unsuspecting investors. 

The high commission structure of these products leads to the possibility that unscrupulous financial advisors will push these products unsuitably to maximize their own commissions. 

Brokerage firms are required to perform adequate due diligence on any investment they recommend and to ensure that all recommendations are suitable for the investor in light of that particular investor’s age, investment experience, net worth, risk tolerance, investment objectives, and income. 

Firms that fail to perform adequate due diligence or that make unsuitable recommendations can be held responsible for investment losses in a FINRA arbitration claim.

Free Consultation with a Securities Attorney

If you suffered losses investing in a Sierra Income Corporation please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit https://whitesecuritieslaw.com.