December 14, 2017
Judge Won’t Take Tilton’s Taxes Off Table In $45M Bank Fight
Law360, New York (December 13, 2017, 9:40 PM EST) — A New York state judge shot down efforts by investment manager Lynn Tilton and her company, Patriarch Partners, to keep certain tax and business information private in a $45 million dispute with a German lender at a hearing on Wednesday, decisions her attorneys said they would appeal.
Judge Eileen Bransten called on Norddeutsche Landesbank Girozentrale, known as Nord/LB, to redact the exact dollar amounts and percentages from its amended complaint, which claims the defendants deceived the bank about the nature of its investment. Her ruling unredacts entire paragraphs of the pleading, however. The judge also rejected Tilton’s bid to sanction Nord/LB and her efforts to prevent discovery of certain K-1 and 1099 tax forms, ruling they are business files, not strictly personal ones.
“Plaintiffs have established that the tax documents are essential … to their claims,” she said at the Wednesday hearing.
An exchange Wednesday between the judge and Mary Beth Maloney, who represents Tilton and Patriarch, became heated at points, with the lawyer suggesting that the judge misunderstood how the funds were structured and the judge defending her reasoning. At another point, the judge said Maloney had the “wrong attitude” about the plaintiffs’ proposed deposition of Tilton’s tax lawyer.
Maloney also sought permission to file a motion to dismiss the new complaint. Judge Bransten said a motion to dismiss and an appeal could both go ahead, but said discovery had to continue in the meantime unless a higher court ruled otherwise. “I’ve never found a need to stay [my own decisions] because I think I’m right,” the judge said.
Jenny Kim, a lawyer for Nord/LB, said in an email that she and her colleagues “are thrilled with Justice Bransten’s decision and are excited to move this case forward towards trial.”
Nord/LB is represented by Michael M. Fay, Jenny H. Kim and Chris L. Sprengle of Berg & Androphy PC.