Sierra Income Corp. Seeks Strategic Alternatives as Value Declines

Recovery of Investment Losses for Sierra Income Corp Shareholders 

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 firm has received numerous calls from investors regarding financial losses after their broker recommended investing in Sierra Income Corp. 

Sierra is a non-traded business development company that invests primarily in first lien senior secured debt, second lien secured debt and, to a lesser extent, subordinated debt of middle market companies.

Sierra Income Corp. Big Decline in Value

The company’s current Net Asset Value continues to decline at $5.28 per share as of March 31, 2021. Shares of Sierra Income Corp recently sold on Central Trade and Transfer, a secondary market for alternative investments, for just $2.06 per share. This may signify big losses for investors since the original offering price was $10 per share.   

On May 27, 2021, Sierra Income Corporation announced that its Board of Directors has entered into a formal review process to evaluate strategic alternatives for the Company, and authorized a Special Committee to lead the process, according to a press release.  The Special Committee has engaged Broadhaven Capital Partners as its financial advisor.

Disappointing Distribution Rate 

In August the company elected to extend the suspension of distributions through September 30, 2020,  claiming the suspension was in the best interest of the shareholders “during this volatile economic environment.” 

In April, the company then announced that, on April 28, 2021, its Board of Directors  declared a series of paltry monthly distributions for April, May, and June 2021 of just $0.010 per share. The company also authorized a limited share repurchase program, equal to $5.28, which represents the Company’s net asset value per share as of March 31, 2021

Failed Merger Plans

Last May, the company announced that its Board of Directors terminated its previously announced mergers with Medley Capital Corporation (“MCC”) and Medley Management Inc. (“MDLY”).

Sierra noted that changes were due to the relative valuations of the Company, MCC, and MDLY, and the “unpredictable economic conditions resulting from the global health crisis caused by the coronavirus (COVID-19) pandemic, and the uncertainty regarding the parties’ ability to satisfy the conditions to closing in a timely manner,” according to a press release.

High Risk Alternative Investments

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.

Potential to Recover Financial Losses

If you suffered losses investing in a Sierra Income Corporation with your financial advisor, 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.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit https://whitesecuritieslaw.com.