Turnaround executive Lynn Tilton is headed toward trial in New York this fall, after failing to block a long-running lawsuit from an early investor in her Zohar funds, investment vehicles meant to make loans to distressed companies, WSJ Pro Bankruptcy reported. German bank Norddeutsche Landesbank Girozentrale, or Nord, the investor, sued Tilton in 2015, around the time that the U.S. Securities and Exchange Commission filed civil fraud charges against her. Tilton beat the SEC’s case, but, in a ruling this week, Judge Joel Cohen of the New York Supreme Court said that the win against the agency on the civil fraud charges won’t protect her from Nord’s lawsuit. “This Court previously determined that the SEC proceedings were ‘primarily concerned with whether Tilton misled investors about the fees they owed by making the Zohar Funds appear more valuable than they actually were,’ and ‘did not necessarily reach the issue of whether Defendants misrepresented the purpose, operation and management of the Zohar Funds,’ as alleged here,” Judge Cohen wrote.
