If the filing person has previously filed a
statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because
of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.
o
*The remainder of this cover page shall be
filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for
any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of
this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions
of the Act (however, see the Notes).
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CUSIP No. 58503T106
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SCHEDULE 13D
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1
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NAME OF REPORTING PERSONS
Seth Taube
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP
(a) o
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
OO
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF
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7
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SOLE VOTING POWER
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SHARES
BENEFICIALLY
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8
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SHARED VOTING POWER
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499,999 *
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OWNED BY
EACH
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9
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SOLE DISPOSITIVE POWER
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REPORTING
PERSON WITH
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10
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SHARED DISPOSITIVE POWER
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499,999 *
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
499,999 *
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT
IN ROW (11)
16.4%*
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14
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TYPE OF REPORTING PERSON
IN
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*As of
January 19, 2021, Seth Taube may be deemed to beneficially own 499,999 shares of Class A common stock, par value $0.01 per share
(“Common Stock”), of Medley Management Inc., a Delaware corporation (the “Issuer”), or 16.4% of the shares
of Common Stock deemed issued and outstanding as of the date hereof. The shares of Common Stock reported herein include (i) 450,000
shares of Common Stock and (ii) 49,999 Class A Units of Medley LLC exchangeable into Common Stock of the Issuer on a one-for-one
basis held directly by Freedom 2021 LLC. Mr. Taube owns 99% of Freedom 2021 LLC and is the Managing Member.
The beneficial ownership percentage is based on
3,045,177 shares of Common Stock issued and outstanding as of January 19, 2021 based on information provided by the Issuer and other public
information.
The securities beneficially owned by Mr.
Taube represent 26.8% of the voting power of the Issuer, calculated by reference to the quotient of (A) (i) 450,000 votes
attributable to the shares of Common Stock of the Issuer beneficially owned by Mr. Taube (each of which is entitled to one
vote per share on matters submitted to the Issuer’s stockholders) plus (ii) 499,990 votes attributable to the 49,999
Class A Units of Medley LLC beneficially owned by Mr. Taube (each of which is entitled to ten votes per unit on matters
submitted to the Issuer’s stockholders, pursuant to the voting rights of the Issuer’s Class B common stock held
by Medley Group LLC, an entity controlled by Mr. Taube), divided by (B) 3,545,167 (representing the 3,045,177 shares of the
Issuer’s Common Stock outstanding plus the 499,990 votes underlying Mr. Taube’s Medley LLC Class A Units).
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CUSIP No. 58503T106
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SCHEDULE 13D
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1
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NAME OF REPORTING PERSONS
Freedom 2021 LLC
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER
OF A GROUP
(a) o
(b) o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
OO
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Wyoming, United
States
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NUMBER OF
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7
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SOLE VOTING POWER
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0
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SHARES
BENEFICIALLY
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8
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SHARED VOTING POWER
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499,999 *
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OWNED BY
EACH
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9
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SOLE DISPOSITIVE POWER
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0
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REPORTING
PERSON WITH
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10
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SHARED DISPOSITIVE POWER
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499,999 **
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
499,999 *
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12
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CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT
IN ROW (11)
16.4%*
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14
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TYPE OF REPORTING PERSON
OO
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*The shares of Common Stock reported herein include (i) 450,000 shares of Common Stock and (ii) 49,999 Class A Units of Medley LLC exchangeable
into Common Stock of the Issuer on a one-for-one basis held directly by Freedom 2021 LLC. Mr. Taube owns 99% of Freedom 2021 LLC and is
the Managing Member.
The beneficial ownership percentage is based on 3,045,177 shares of Common Stock issued and outstanding as of January
19, 2021 based on information provided by the Issuer and other public information.
The securities represent 26.8% of the voting power of
the Issuer, calculated by reference to the quotient of (A) (i) 450,000 votes attributable to the shares of Common Stock of the Issuer
beneficially owned by Mr. Taube (each of which is entitled to one vote per share on matters submitted to the Issuer’s
stockholders) plus (ii) 499,990 votes attributable to the 49,999 Class A Units of Medley LLC beneficially owned by Mr. Taube (each of
which is entitled to ten votes per unit on matters submitted to the Issuer’s stockholders, pursuant to the voting rights
of the Issuer’s Class B common stock held by Medley Group LLC, an entity controlled by Mr. Taube), divided by (B) 3,545,167 (representing
the 3,045,177 shares of the Issuer’s Common Stock outstanding plus the 499,990 votes underlying Freedom 2021 LLC’s Medley
LLC Class A Units).
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CUSIP No. 58503T106
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SCHEDULE 13D
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ITEM 1. SECURITY
AND ISSUER
The securities to which
this Schedule 13D (the “Schedule 13D”) relates are shares of Class A common stock, par value $0.01 per share
(“Common Stock”), of Medley Management Inc., a Delaware corporation (the “Issuer”), whose
principal executive offices are located at 280 Park Avenue, 6th Floor East, New York, New York 10017.
ITEM 2. IDENTITY
AND BACKGROUND
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(a)
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This report on this Schedule 13D is being jointly filed by (i) Freedom
2021 LLC (“Freedom 2021”) and (ii) Seth Taube, individually and as the Managing Member of Freedom 2021 (“Mr. Taube”
and, together with Freedom 2021, the “Reporting Persons”).
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(b)
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The business address for Mr. Taube is 280 Park Avenue, 6th Floor
East, New York, New York 10017. The address for Freedom 2021 is 32 Rose Lane Larkspur CA 94939.
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(c)
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Mr. Taube is the Co-Chief Executive Officer and CIO of the Issuer.
Freedom 2021 is a Wyoming limited liability company controlled by Mr. Taube.
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(d)
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During the last five years, the Reporting Persons have not been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors).
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(e)
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During the past five years, the Reporting Persons have not been a
party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was
or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to such laws.
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(f)
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Mr. Taube is a United States citizen. Freedom 2021 is organized under
the laws of the state of Wyoming.
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ITEM 3. SOURCE
AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The information contained
in rows 7, 8, 9, 10, 11 and 13 of the cover pages of this Schedule 13D and the information set forth in or incorporated by reference
in Item 2, Item 4, Item 5 and Item 6 of the Schedule 13D is hereby incorporated by reference in its entirety into this Item 3.
On January 19, 2021, pursuant
to and in accordance with the terms of the Exchange Agreement and Registration Rights Agreement, each dated as of September 23,
2014 (the “Exchange Agreement”) and the “Registration Rights Agreement”), by and among the
Issuer, Medley LLC (“Medley LLC”) and the holders of LLC Units (each, a “Unitholder”) representing
membership interests in Medley LLC (“LLC Units”), the Unitholders, including Reporting Persons exchanged substantially
all of their vested LLC Units for shares of Common Stock on a one-for-one basis (collectively, the “Unit Exchange”).
The securities reported
herein were issued in exchange for the surrender back to the Issuer of an equivalent number of vested LLC Units held by the Reporting
Persons.
The foregoing description
of the Exchange Agreement is a summary only and is qualified in its entirety by reference to the full text of such document, a
copy of which is filed as Exhibit 10.2 to the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31,
2019 and is incorporated herein by reference.
ITEM 4. PURPOSE
OF TRANSACTION
The information contained
in rows 7, 8, 9, 10, 11 and 13 of the cover pages of this Schedule 13D and the information set forth in or incorporated by reference
in Item 2, Item 3, Item 5 and Item 6 of the Schedule 13D is hereby incorporated by reference in its entirety into this Item 4.
On January 17, 2021,
pursuant to a court approved marital settlement order for a divorce 500,000 LLC Units were distributed to Mr. Taube’s
ex-wife. Subsequent to and in connection with the marital settlement, 499,999 LLC Units were contributed to Freedom 2021 LLC.
Mr. Taube no longer beneficially owns any securities owned by his ex-wife. Accordingly, Taube may be deemed to beneficially
own 499,999 shares of Common Stock of the Issuer, or 16.4% of the shares of Common Stock deemed issued and outstanding as of
the date hereof. The shares of Common Stock reported herein include (i) 450,000 shares of Common Stock and (ii)
49,999 Class A Units of Medley LLC exchangeable into Common Stock of the Issuer on a one-for-one basis held directly by
Freedom 2021 LLC. Mr. Taube owns 99% of Freedom 2021 LLC and is the Managing Member.
The beneficial ownership
percentage is based on 3,045,177 shares of Common Stock issued and outstanding as of January 19, 2021 based on information provided
by the Issuer and other public information.
The securities
beneficially owned by Mr. Taube represent 26.8% of the voting power of the Issuer, calculated by reference to the quotient of
(A) (i) 450,000 votes attributable to the shares of Common Stock of the Issuer beneficially owned by Mr. Taube (each of which
is entitled to one vote per share on matters submitted to the Issuer’s stockholders) plus (ii) 499,990 votes
attributable to the 49,999 Class A Units of Medley LLC beneficially owned by Mr. Taube (each of which is entitled
to ten votes per unit on matters submitted to the Issuer’s stockholders, pursuant to the voting rights of the
Issuer’s Class B common stock held by Medley Group LLC, an entity controlled by Mr. Taube), divided by (B) 3,545,167
(representing the 3,045,177 shares of the Issuer’s Common Stock outstanding plus the 499,990 votes underlying Mr.
Taube’s Medley LLC Class A Units).
Other than as described
herein, the Reporting Person currently has no plans or proposals that relate to, or would result in, any of the matters listed
in Items 4(a) through (j) of Schedule 13D, although the Reporting Person may, at any time and from time to time, review or reconsider
their position, change their purpose and/or formulate plans or proposals with respect thereto.
ITEM 5. INTEREST
IN SECURITIES OF THE ISSUER
The information contained
in rows 7, 8, 9, 10, 11 and 13 of the cover pages of this Schedule 13D and the information set forth in or incorporated by reference
in Item 2, Item 3, Item 4 and Item 6 of the Schedule 13D is hereby incorporated by reference in its entirety into this Item 5.
(a-b) Mr. Taube may be deemed to beneficially
own (with sole voting and dispositive power) 499,999 shares of Common Stock, which represents approximately 16.4% of the outstanding
Common Stock of the Issuer as of the date hereof.
(c) Other than transfers between and among
entities owned and controlled by Mr. Taube for estate planning purposes, where beneficial ownership remained unchanged, and as
otherwise set forth herein, the Reporting Persons have not effected any transactions in the Issuer’s Common Stock during
the 60 days prior to the date hereof, there were no transactions effected in the Common Stock (or securities convertible into,
exercisable for or exchangeable for Common Stock) by the Reporting Person or any person or entity controlled by him or any person
or entity for which he possesses voting or investment control over the securities thereof.
(d) Except as otherwise reported herein, no
person or entity other than the Reporting Person has the right to receive, or the power to direct the receipt of dividends from,
or the proceeds from the sale of the shares of the Issuer’s Common Stock reported on this Schedule 13D.
(e) Not applicable.
ITEM 6. CONTRACTS,
AGREEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
The information contained
in rows 7, 8, 9, 10, 11 and 13 of the cover pages of this Schedule 13D and the information set forth in or incorporated by reference
in Item 2, Item 3, Item 4 and Item 5 of the Schedule 13D is hereby incorporated by reference in its entirety into this Item 6.
Tax Receivable Agreement
On September 23, 2014,
the Issuer entered into a Tax Receivable Agreement with the Unitholders (the “Tax Receivable Agreement”) that
provides for the payment by the Issuer to exchanging Unitholders of 85% of the benefits, if any, that the Issuer is deemed to realize
as a result of the increases in tax basis and of certain other tax benefits related to entering into the Tax Receivable Agreement,
including tax benefits attributable to payments under the Tax Receivable Agreement. This payment obligation is an obligation of
the Issuer and not of Medley LLC. The Issuer expects to benefit from the remaining 15% of cash tax savings, if any, in income tax
it realizes. For purposes of the Tax Receivable Agreement, the cash tax savings in income tax will be computed by comparing the
actual income tax liability of the Issuer (calculated with certain assumptions) to the amount of such taxes that the Issuer would
have been required to pay had there been no increase to the tax basis of the assets of Medley LLC as a result of the exchanges
and had the Issuer not entered into the Tax Receivable Agreement. The term of the Tax Receivable Agreement will continue until
all such tax benefits have been utilized or expired, unless the Issuer exercises its right to terminate the Tax Receivable Agreement
for an amount based on the agreed payments remaining to be made under the agreement (as described in more detail below) or the
Issuer breaches any of its material obligations under the Tax Receivable Agreement in which case all obligations generally will
be accelerated and due as if the Issuer had exercised its right to terminate the Tax Receivable Agreement.
The amount and timing of
any payments under the Tax Receivable Agreement will vary depending upon a number of other factors, including the amount and timing
of the income realized by the Issuer, if any. The Issuer will be required to pay 85% of the cash tax savings as and when realized,
if any. If the Issuer does not have taxable income, the Issuer will not be required (absent circumstances requiring an early termination
payment) to make payments under the Tax Receivable Agreement for that taxable year because no cash tax savings will have been realized.
However, any cash tax savings that do not result in realized benefits in a given tax year will likely generate tax attributes that
may be utilized to generate benefits in previous or future tax years. The utilization of such tax attributes will result in payments
under the Tax Receivable Agreement.
The foregoing description
of the Tax Receivable Agreement is a summary only and is qualified in its entirety by reference to the full text of such document,
a copy of which is filed as Exhibit 10.3 to the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31,
2019 and is incorporated herein by reference.
Registration Rights
Agreement
Pursuant to the Exchange
Agreement and the Registration Rights Agreement, the Unitholders have certain registration rights with respect to the shares of
Common Stock delivered in exchange for LLC Units, pursuant to the terms and subject to the conditions of the Registration Rights
Agreement.
The foregoing description
of the Registration Rights Agreement is a summary only and is qualified in its entirety by reference to the full text of such document,
a copy of which is filed as Exhibit 10.4 to the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31,
2019 and is incorporated herein by reference.
Except as otherwise set
forth in this Schedule 13D, there are no contracts, arrangements, understandings or similar relationships existing with respect
to the securities of the Issuer and the Reporting Person.
ITEM 7. MATERIAL
REQUIRED TO BE FILED AS EXHIBITS
The following exhibits are incorporated into
this Schedule 13D.
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Exhibit 1
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Joint Filing Agreement dated January 19, 2021 signed by each Reporting Person order to confirm that this Schedule 13D (and any amendments hereto) are being filed on behalf of each of the Reporting Persons
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Exhibit 2
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Exchange Agreement, dated as of September 23, 2014 by and among the Issuer, Medley LLC and the Unit Holders (filed as Exhibit 10.2 to the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and incorporated herein by reference))
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Exhibit 3
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Tax Receivable Agreement dated September 23, 2014 between the Issuer and Unitholders (filed as Exhibit 10.3 to the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and incorporated herein by reference)
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Exhibit 4
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Registration Rights Agreement, dated as of September 23, 2014, by and among the Issuer, Medley Group LLC filed as Exhibit 10.4 to the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and incorporated herein by reference)
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SIGNATURES
After reasonable inquiry
and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
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Dated: January 20, 2021
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By:
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/s/ Seth Taube
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Seth Taube
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FREEDOM 2021 LLC
By: /s/ Seth Taube
Managing Member
Attention: Intentional misstatements
or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001).