Law360, New York (March 2, 2016, 5:22 PM ET) — A New York judge on Wednesday said a German bank’s $45 million lawsuit claiming private equity magnate Lynn Tilton and her Patriarch Partners firm misled the lender about the nature of its collateralized debt obligation investments can proceed, but trimmed one of two claims from the case.
Norddeutsche Landesbank Girozentrale, a major regional German bank, and an affiliate claim Tilton and Patriarch Partners told investors that her investment vehicles, known as the Zohar funds, were being used to purchase only collateralized debt obligations. In fact, the lender contends, Tilton used the Zohar funds to purchase risky manufacturing companies and forced the funds to give millions of dollars in loans to keep the companies afloat while she extracted exorbitant fees.