Milberg LLP Announces Investigation of Patriarch Partners
NEW YORK, March 6, 2015 /PRNewswire/ -- Patriarch Partners, a private-equity firm founded by Lynn Tilton was accused by the U.S. Securities & Exchange Commission (SEC) of overvaluing its investment in Zohar securities, the collateralized loan obligations (CLOs) in its financial statements, by improperly valuing the related underlying loans.
Patriarch informed its CLO investors of the potential SEC enforcement action and that the firm retained an investment banker to initiate discussions with investors about restructuring the CLOs. Patriarch asserted that it opposes the SEC's position and has "employed what it believes to be a conservative methodology" for valuing its loans. Patriarch also disputed the SEC's additional claim that alleges Patriarch used faulty asset tests to ascertain cash flows to investors in the securities.
According to a report by Andrew Gadlin, an analyst at Odeon Capital Group, Patriarch's Zohar securities pose a "significant" threat to MBIA Inc., the bond insurer that guarantees the CLOs. "The nature of the disagreements" between Patriarch and the SEC "only confirms our view that a significant portion of the Zohar assets are underwater and unlikely to be refinanced in such a way as to avoid noteholder losses and claims" against the MBIA insurance unit, Gadlin wrote.
Radian Group Inc., backing up MBIA as the secondary insurer of Patriarch's CLOs, purchased $100 million of default protection to help hedge against losses.
If you are an investor with information about this matter it could be useful to our investigation, which is focused on evaluating legal options for investors that have lost money.
Milberg pioneered class action litigation and has represented plaintiffs for 50 years in the prosecution of class and complex actions including defrauded Madoff investors.
If you would like to learn more about this potential matter, please contact the following attorney:
Andrei Rado, Esq.
Milberg LLP
One Pennsylvania Plaza, 49th Fl.
New York, NY 10119-0165
Phone number: (800) 320-5081
Email: [email protected]
SOURCE Milberg LLP
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