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Zais Investment Grade VII collateral manager supports case dismissal
By Caroline Salls
Pittsburgh, Aug. 5 - Zais Investment Grade Ltd. VII collateral manager Zais Group, LLC plans to support Hildene Capital Management, LLC's motion to dismiss the involuntary Chapter 11 bankruptcy case filed against Zais Investment Grade VII, according to a letter to investors from Zais Group chief operating officer Michael F. Szymanski.
Szymanski said that Zais Group did not have the legal right to oppose the involuntary petition filed by Anchorage Capital, LLC and its affiliates because Zais Investment Grade VII has its own board of directors and counsel.
According to the letter released on Friday, Zais lost its ability to direct the purchase or sale of any of Zais Investment Grade VII's assets when the company's notes were accelerated in June 2009.
"While Zais would have liked to continue to actively manage the [Zais Investment Grade] VII collateral, it was the action of noteholders in accelerating the notes that ended ZAIS's right to manage the collateral pool," Szymanski said in the letter.
"Zais did not, and does not, support the filing of the involuntary petition, and has been frustrated at its inability to intervene in the proceedings up to this point due to its lack of either contractual or judicial standing," the letter said.
"However, at this stage in the proceedings, after extensive consultation with our counsel, Zais has decided to file papers in support of Hildene's motion to dismiss the involuntary petition."
Zais is a Cayman Islands-based investment company. The involuntary Chapter 11 case was filed on April 1 in the U.S. Bankruptcy Court for the District of New Jersey, and the case number is 11-20243.
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