Lynn Tilton’s Equity Stealing Scheme Suit Against MBIA Dismissed

Distressed-debt investor Lynn Tilton lost her bid to pursue her claims that bond insurer MBIA Inc. schemed with others to steal over a billion dollars of equity holdings in her distressed companies.

Tilton and her private equity firm Patriarch Partners have failed to sufficiently show a foundation for claims against MBIA and several major bondholders involved in her distressed debt loan fund Zohar III Corp.'s Chapter 11 case, Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware ruled.

“Significant time, effort, and resources of not only the Defendants but of numerous courts have been expended ...