Medallion Financial Corp. has agreed to buy trust preferred securities from BIMIZCI Fund LLC under a settlement that also bars BIMIZCI and ZimCal Asset Management LLC from campaigning against the company for five years.
The securities carry a $15 million liquidation amount, while Medallion agreed to pay $11.049 million plus distributions accumulated through the repurchase date. The base price is 73.66% of face value. ZimCal is a party to the settlement; BIMIZCI is the seller.
For five years, BIMIZCI and ZimCal have agreed not to solicit shareholder proxies or mount other campaigns against Medallion. They also agreed to dispose of any Medallion common shares they still hold by Dec. 31, 2026.
The deal follows a prolonged contest over Medallion's board. In proxy materials filed with the SEC, BIMIZCI described discussions with directors about oversight, business strategy and the use of company capital from August 2023 through April 2026. Medallion said in a filing that none of BIMIZCI's nominees won at its June 2026 annual meeting, the third consecutive annual meeting at which BIMIZCI had nominated directors.
The securities' $15 million liquidation amount is about 45.5% of the $33 million in trust preferred securities Medallion reported outstanding on June 30, 2026. That comparison uses the company's balance on that date.
Medallion expects to record a fourth-quarter gain based on the securities' $15 million carrying value and its cost to acquire them. It did not estimate the gain. Medallion President and CEO Andrew Murstein said the deal was expected to be “immediately accretive” and to deliver value for common shareholders.
ZimCal founder Stephen Hodges called the agreement a “mutually acceptable resolution.” The transaction remains subject to customary closing conditions, and Medallion expects it to close within 30 days of its Oct. 19 announcement.
Medallion said it would file the agreement as an exhibit to a Form 8-K with the SEC. It plans to release third-quarter results after the market closes Oct. 29 and hold an earnings call at 9 a.m. ET Oct. 30.
