Lynn Tilton, the CEO and financier of Dura Automotive Systems LLC, is likely to face a serious challenge in bankruptcy court.
The Auburn Hills, Michigan company and its domestic subsidiaries filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Middle District of Tennessee in hopes of clearing Dura from Tilton’s investment company’s obligations to repay a bond insurer in an unrelated legal dispute.
Tilton reached a legal settlement in May with bond insurer MBIA Inc. The agreement involved three bankrupt investment funds Tilton and MBIA had created to originate loans for distressed companies owned by her turnaround firm.
Tilton’s Patriarch Partners, 73 percent majority owner of Dura, has sought to sell the maker of driver control systems, lightweight metal vehicle frames and battery trays for at least a year, with Bloomberg reporting a potential $1 billion price tag.
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