Chancery Skeptical Of Tilton 'Mistake' In $6.5M Fee Settlement

Law360 (February 23, 2021, 8:53 PM EST) -- A Delaware vice chancellor rejected suggestions Tuesday that distressed-business turnaround figure Lynn Tilton made a "simple mistake" last year in failing to notify bankrupt noteholder funds about her unilateral, $6.5 million legal fee settlement with insurers despite a court order to maintain the status quo.

Vice Chancellor Joseph R. Slights III made the point during a videoconference argument on sanctions prompted by a contempt of court finding against Tilton in August. In that ruling, the court found that Zohar II Ltd. and affiliates were denied an opportunity and voice in the insurance settlement, which also secured releases for the insurer from...

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