Medley disclosure statement draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Aug. 10 – Medley LLC’s disclosure statement for its Chapter 11 plan of reorganization drew an objection Monday from Regions 3 and 9 U.S. trustee Andrew R. Vara, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

Vara said that the debtor is seeking authority to file a plan supplement three days before the plan voting deadline, which is contrary to local rules, which require plan supplements to be filed seven days before the plan filing deadline.

“Three days is an insufficient period of time in this case for parties voting on the plan to review and digest all of the information that the Debtor proposes to include in the plan supplement,” Vara said.

In addition, Vara said the plan and disclosure statement contain overly broad debtor release and exculpation provisions.

Because the definition of exculpated parties is not limited to fiduciaries who have served during the Chapter 11 cases, the exculpation provision is overbroad and the plan can’t be confirmed as written, the U.S. trustee said.

New York-based Medley is an alternative asset management firm offering yield solutions to retail and institutional investors. The company filed bankruptcy on March 7 under Chapter 11 case number 21-10526.

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