New Delaware Chapter 11 Filing – Zohar III, Corp.

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Zohar III, Corp., along with five of its subsidiaries and affiliates, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware (Lead Case No. 18-10512).  The Petition estimates Zohar III’s assets to be between $1–$10 billion and its liabilities to be between $500 million–$1 billion.  The Debtors, which are headquartered in New York, NY, comprise a group of private investment funds managed by their sole director and owner, Lynn Tilton.  According to Tilton’s First Day Declaration, the Debtors have filed in order to centralize and resolve ongoing litigation with Alvarez & Marsal Zohar Management and MBIA Insurance Corporation, to sell or monetize certain funds, and to provide for the orderly payment of the Debtors’ creditors and investors.  The First Day Declaration of the Debtors’ Chief Restructuring Officer explains that the ongoing litigation, consisting of no less than nine (9) active, pending cases across seven (7) jurisdictions involving dozens of parties, is leading to destruction of value and the Debtors were left with no choice but to file Chapter 11.  No claims and noticing agent has been proposed yet.  The cases have been assigned to the Honorable Christopher S. Sontchi.


Contact Norman L. Pernick or Nicholas J. Brannick for more information regarding this matter.  Please note, however, that Cole Schotz P.C. does not represent the debtors in these cases and cannot respond to questions directed toward the debtors.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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