The Zohar investment funds at the heart of Lynn Tilton’s $2.5 billion distressed-debt empire sued their founder Monday, accusing Ms. Tilton of pillaging more than $1 billion from investors and the troubled companies she manages, the Wall Street Journal reported. Through a “toxic mix of fraud, theft and mismanagement,” Tilton stole money from the Zohar funds and from the troubled companies, siphoning hundreds of millions of dollars in fees and assets from a souring loan portfolio and failing businesses, according to the lawsuit filed in federal court in New York. Tilton denied the allegations in the suit. The Zohar funds are collateralized loan obligations created by Tilton and packed with loans to troubled companies managed by her and her New York-based Patriarch Partners investment firm. Read more. (Subscription required.)
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