Lynn Tilton is heading back to court. This time investors Norddeutsche Landesbank Girozentrale and Hannover Funding Co., are suing her private equity firm Patriarch Partners.
The investors’ allegations look a lot like the suit Tilton is facing separately from the Securities and Exchange Commission. Both have to do with three specific funds Patriarch managed known as Zohar I, II and III.
Unlike the SEC though, Tilton’s investors are seeking $US44 million in compensatory damages, according to the report, plus punitive damages.
According to a Bloomberg report Monday afternoon, the investors said they relied on Patriarch statements in offering and transaction documents regarding the fund’s loans.
The “vast majority” of those statements, according ot the investors, were false or misleading, according to the report, which said the suit was filed Monday in New York State Supreme Court.
Business Insider has previously reported on the issue at the crux of Tilton’s legal matter with the SEC — her defence against the Securities and Exchange Commission, which has accused her of fraud. Filings Tilton submitted with the SEC in which she stated her fund does not prepare financial statements in line with Generally Acceptable Accounting Principles (GAAP) could prove crucial in her SEC case.
Tilton, for her part, has recorded a YouTube video in which she seeks to exonerate herself, and has filed a separate lawsuit against the SEC. She has also made numerous media apperances in which declared she is “baffled” as to why the agency is suing her for fraud.
Patriarch Partners did not immediately have a comment when contacted by Business Insider.