'Turnaround Queen' Tilton's Fight With MBIA Goes On
- Judge in Zohar bankruptcy case wants full hearing of evidence
- A bankruptcy could roil global market in structured finance
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An investment vehicle created by self-styled turnaround queen Lynn Tilton will get a full federal court hearing on a bankruptcy petition that could affect $800 million in debt insured by MBIA Inc. and disrupt the market in structured investment products.
U.S. Bankruptcy Judge Robert Drain in White Plains, New York, said he wants to hold an evidentiary hearing in about two weeks over the petition, filed by Tilton’s Patriarch Partners LLC. The petition would force the vehicle, Zohar I, into bankruptcy. Drain said he wants to determine if a reorganization plan for Zohar, made up of loans to distressed companies, would serve a valid legal purpose or become “a pig in a poke.”