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Zohar III: Patriarch parties seek equal protection in cash use order
By Caroline Salls
Pittsburgh, Dec. 10 – Zohar III, Corp.’s Patriarch secured parties objected to the company’s proposed use of cash collateral, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.
The Patriarch parties include Patriarch Partners XV, LLC, Octaluna, LLC, Octaluna II, LLC and Octaluna III, LLC, as well as Patriarch Partners, LLC, Patriarch Partners VIII, LLC and Patriarch Partners XIV, LLC.
“In a gross abuse of leverage, MBIA and the Zohar III controlling class have once again forced the debtors to exclude the Patriarch secured parties’ more than $832 million in secured claims from material protections afforded to other secured creditors,” the objection said.
Patriarch said this unequal treatment is not allowed by the company’s indentures, and the Patriarch secured claims share the same collateral and same liens as the MBIA and Zohar III controlling class claims.
In addition, Patriarch said the proposed cash collateral order attempts to reimburse MBIA and the Zohar III controlling class for litigating with the Patriarch secured parties while monetization efforts are underway.
If the court does determine that MBIA and the Zohar III controlling class are entitled to individualized adequate protection, Patriarch said any cash collateral order must provide the Patriarch secured parties with adequate protection on par with what is provided to MBIA and the Zohar III controlling class.
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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