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Zohar: Patriarch stakeholders eye clarification on Tilton resignation
By Caroline Salls
Pittsburgh, April 16 – Zohar III, Corp.’s Patriarch stakeholders are asking the U.S. Bankruptcy Court for the District of Delaware to amend a March 30 order to make clear that portfolio companies manager and director Lynn Tilton may remain in those positions until replacements are elected, according to a motion filed Wednesday.
As previously reported, under the March 30 order, the Zohar III debtors were deemed in control of a group of portfolio companies. The order also acknowledged the resignation as manager, director or officer of those companies by Tilton, effective as of March 21.
Tilton and other Patriarch stakeholders were also ordered to work in good faith with the Zohar debtors to transition the ownership and control of the portfolio companies.
However, Wednesday’s motion said Tilton rescinded her resignation because the Zohar debtors were not able to unilaterally elect a replacement director or manager given the existence of voting rights owned by some Patriarch stakeholders.
“To assuage debtors’ concern that the five portfolio companies were without adequate corporate governance during the transition period, Ms. Tilton rescinded her resignation only until such time as a replacement could be duly elected,” the motion said.
Tilton and the Patriarch stakeholders said counsel for the Zohar debtors informed Patriarch’s counsel on Tuesday that they believed the March 30 order rendered Tilton’s rescissions ineffective.
A hearing is scheduled for April 21.
Zohar is a Grand Cayman, Cayman Islands-based collateralized debt obligation. The company filed bankruptcy on March 11, 2018 under Chapter 11 case number 18-10512.
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