The Zohar funds have filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware, with a goal of monetizing their assets and paying off all allowed claims in full.
Lynn Tilton, sole director of Zohar CDO 2003-1, Zohar CDO 2003-1 Corp., Zohar II 2005-1 Ltd., Zohar II 2005-1 Corp., Zohar III Ltd. and Zohar III Corp., announced the filing.
The filing will stay certain litigation matters involving the Zohar funds that were commenced after Tilton voluntarily resigned as collateral manager in 2016. The Zohar funds have been battling litigation for years with Tilton at the center of legal battles over three structured debt vehicles she used to finance distressed companies. Bloomberg News reported that court filings cited six lawsuits filed by MBIA Inc. unit MBIA Insurance Corp.
Tilton said litigation involving the Zohar funds prevents her from refinancing portfolio company loans and selling the portfolio companies to which the Zohar funds have made senior secured loans. The filing does not trigger any defaults on portfolio company loans or business contracts or disrupt the portfolio companies' operations, according to a company release.
The Zohar funds proposed that the bankruptcy court appoint Mark Kirschner of Goldin Associates as chief restructuring officer.
