Of the. The Judge Slams the Door on Tilton Ch. 11 Subordination Suit

By Jeff Montgomery (March 25, 2022, 6:49 p.m. EDT) — A Delaware bankruptcy judge on Friday dismissed without leave to amend struggling debt entrepreneur Lynn Tilton’s long battle to subordinate the claims of insurers, bondholders notes and others to its own interests in the ongoing “Zohar Fund” Chapter 11.

Judge Karen B. Owens, in a 44-page decision, found that Tilton “does not plausibly allege” that note-bearing insurer MBIA, the class of creditors controlling “Zohar III” and others have plotted to retain unwarranted control of the multi-billion dollar bankruptcy after a mediated settlement in May 2018.

“Defendants’ alleged motives and actions underlying plaintiffs’ equitable subordination claims have been advanced and argued in various…

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