Lynn Tilton took the witness stand in a Manhattan courtroom and urged a judge to maintain a freeze on the sale of assets in one of her former investment funds so she can renegotiate the terms of the auction to get more bidders and a bigger recovery for investors, Bloomberg News reported today. Tilton, the founder of Patriarch Partners LLC, won a temporary halt to the auction last month after she sued the trustee of the Zohar I distressed loan fund. She argued that the planned sale was a sham structured to benefit MBIA Inc., the insurer that holds a $149 million claim on the collateral. As currently structured, the auction would "chill" interest and frighten possible bidders for the collateral because it wouldn’t give them enough time for research, she said. The sale involves more than 100 financial assets and more than 50 entities in more than 20 industries, Tilton told U.S. District Judge Jed Rakoff yesterday.
