A Delaware corporate law judge has backed a bid to oust distressed company manager Lynn Tilton from control of some of the companies she has been running, finding the businesses belong to investors that once backed her but now want her gone, WSJ Pro Bankruptcy reported. The ruling on Thursday from Vice Chancellor Joseph Slights of Delaware’s Court of Chancery is a setback for Tilton, a pioneer in raising investor funds to salvage troubled companies. She recently was cleared of fraud charges from the Securities and Exchange Commission but failed to persuade the Delaware judge that she is the true owner and rightful manager of some of the most valuable companies in her collection of distressed businesses. “We strongly disagree with this ruling and will immediately appeal to the Delaware Supreme Court,“ said a representative for Patriarch Partners, Tilton’s management and investment firm. The representative called the lawsuit “nothing more than a bad-faith attempt” to oust Tilton from control of the companies.
