Zohar III: Court approves sale of portfolio company to Lynn Tilton

By Sarah Lizee

Olympia, Wash., April 14 – The court overseeing Zohar III, Corp.’s bankruptcy case has approved the sale of one of its portfolio companies, Global Automotive Systems Inc., to Lynn Tilton, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Global Automotive Systems’ common membership is owned 100% by the debtors. Tilton, through her Patriarch entities, is the record holder of Global Automotive Systems’ class A membership interests.

Zohar had objected to the proposed sale, saying that Tilton’s attempt to “squeeze the debtors out” would cause the debtors to release collateral securing $150 million in secured debt, and allow Tilton to take ownership of the portfolio company for zero value to the debtors.

Zohar claimed that Tilton used the “many hats” she has worn at Global Automotive Systems to manipulate the monetization process, which culminated in her remaining the sole bidder for the portfolio company.

Zohar is a Grand Cayman, Cayman Islands-based collateralized debt obligation. The company filed bankruptcy on March 11, 2018 under Chapter 11 case number 18-10512.

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