Lynn Tilton and her Patriarch Partners firms are fighting back.

The Securities and Exchange Commission on Monday charged Tilton and Patriarch with fraud and seeks to bring its claims, after a five year investigation, for an adjudication in an abbreviated administrative proceeding. Now the defendants are retaliating with a lawsuit of their own, filed in a Manhattan federal court and alleging that the SEC’s program for administrative enforcement proceedings — specifically the section regarding the appointment of administrative law judges — violates an article of the U.S. Constitution. They are seeking to have the matter determined in the federal court, noting that the court venue provides greater discovery rights and the right to a trial by jury.

Tilton and Patriarch said, “We felt compelled to bring this suit, which we strongly believe is in the best interests of not only ourselves, but the Zohar funds, the portfolio companies and their employees, and the Zohar fund noteholders.”

Zohar refers to three collateralized loan obligation funds, which comprise of loans to distressed companies. The SEC alleged Tilton and her Patriarch firms breached their fiduciary duties and defrauded clients by failing to value assets in the Zohar funds that reflect their declining value.

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