Zohar III – U.S. Trustee Objects to Lynn Tilton’s Request to Omit Portfolio Company Financial Statements

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October 10, 2018 – The U.S. Trustee assigned to the Zohar III case filed an objection [Docket No. 472] to Lynn Tilton’s motion for a protective order in respect of the financial statements of portfolio companies [Docket No. 454]. The U.S. Trustee asserts, “The Movants must meet their burden of demonstrating that the financial information of the Portfolio Companies is commercial information protected by section 107(b) of the Bankruptcy Code at the hearing on the Motion for Protective Order. In addition, the U.S. Trustee objects to the request to direct the Debtors to omit the financial statements of the Portfolio Companies from the Debtors’ reporting under Bankruptcy Rule 2015.3. Rather, the Debtors must file the financial statements, albeit under seal to the extent this Court finds such information should be so protected. Debtors must comply with certain obligations as set forth in the Bankruptcy Code and Bankruptcy Rules in order to avail themselves of the benefits of being a debtor. While certain of the obligations involve cost, the fact that there may be a cost associated with complying with the Bankruptcy Code and Bankruptcy Rules cannot mean that a debtor should be excused from the obligation. Debtors are aware of the costs associated when they decide to avail themselves of the bankruptcy process. As such, the Motion for a Protective Order must be denied to the extent that he movants and Debtors seek to avoid compliance with preparing the financial reports required under Bankruptcy Rule 2015.3, as embodied in Official Bankruptcy Form 426.”

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