Black Diamond, Spectrum Top Yucaipa In Allied Debt Fight

Law360, Wilmington (July 30, 2013, 9:58 PM EDT) -- Resolving a fight between private equity firms that has dominated Allied Systems Holdings Inc.'s Chapter 11 proceedings, a Delaware bankruptcy judge ruled Tuesday that units of Black Diamond Capital Partners LLC and Spectrum Investment Partners LP, not Yucaipa Cos. LLC, controlled the car carrier's first-lien debt.

Ruling from the bench, U.S. Bankruptcy Judge Christopher S. Sontchi granted Black Diamond and Spectrum's request for summary judgment and found the firms held "requisite lender" status under the $265 million credit agreement, a position that allows them to act on behalf of all of first-lien creditors.

Black Diamond and Spectrum owned the majority of...

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