A New York federal judge absolved financier Lynn Tilton of a $1 billion racketeering lawsuit brought by managers of the Zohar investment funds who want her ousted from some troubled companies she has been running, WSJ Pro Bankruptcy reported. The Friday ruling by U.S. District Judge William H. Pauley III in New York dispensed with part of a legal campaign being waged by the Zohar collateralized loan obligation funds and their manager Alvarez & Marsal against Tilton, their founder. The funds, dubbed Zohar I, II and III, accused Tilton of pillaging money from their investors and the underlying portfolio of distressed companies under her control. The judge’s decision found those allegations to be outside the scope of federal racketeering law, which he said doesn’t allow for claims surrounding the purchase or sale of securities.
