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Zais Investment Grade VII noteholders appeal case dismissal denial
By Caroline Salls
Pittsburgh, Sept. 1 - Zais Investment Grade Ltd. VII A-2 senior secured noteholders Hildene Capital Management and Hildene Opportunities Master Fund, Ltd. appealed a court order denying their motion to dismiss Zais' involuntary Chapter 11 bankruptcy case, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of New Jersey.
The Hildene entities appealed the order to the U.S. District Court for the District of New Jersey.
As previously reported, Hildene said in the case dismissal motion that Anchorage Capital Group, LLC filed the involuntary case against Zais in an attempt to force a sale or liquidation of the company's assets without obtaining the consent of a majority of the company's noteholders.
In addition, Hildene said the bankruptcy case filed by Anchorage only benefits Zais' class A-1 noteholders.
According to the Aug. 26 ruling from judge Raymond T. Lyons, Hildene cannot challenge the involuntary petition because Zais did not contest it and the order for relief has been entered.
In addition, Lyons said Zais has property in the United States and a place of business in the United States through a trustee and the collateral manager, making it is eligible to be a Chapter 11 debtor.
"The petitioning creditors have established a good faith basis for filing this involuntary petition in that they seek to maximize the value of the debtor's assets by actively managing them freed of the strictures of the trust indenture," Lyons said in his ruling.
Zais is a Cayman Islands-based investment company. The involuntary Chapter 11 case was filed on April 1, and the case number is 11-20243.
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