Morrison Cohen Team Prevails at Trial and Obtains Approval of Sale of Global Automotive Systems, LLC

After a hard fought three-day trial before Judge Karen B. Owens in the Bankruptcy Court in Delaware, Morrison Cohen was successful in securing approval of the sale of its client Global Automotive Systems, LLC—a leading manufacturer and of complex metal assemblies and products—to Advanced Vehicle Assemblies, LLC, an affiliate of financier Lynn Tilton and Patriarch Partners. 
 
Morrison Cohen had been engaged by Global six months earlier to put in place and implement a sales and governance process to ensure that the maximum value could be achieved for the company and to protect that process and the company from any improper interference.
 
The Zohar debtors' primary objection to the AVA transaction was based on alleged flaws in the sales process and corporate governance of Global, and that Ms. Tilton had impermissibly influenced the process. In her ruling, Judge Owens made short shrift of each objection and found that,

“the overwhelming weight of the evidence indicates that the GAS process was fair and designed to be value-maximizing; that Ms. Tilton's contributions to the process on behalf of GAS were beneficial; and that the processes established by this Court, as well as Mr. Berger, were followed in all material respects.”

This was a complete validation and approval of Morrison Cohen’s skillful direction of Global during the sales process.
 
As required by the lightning speed inherent in contested sales in bankruptcy cases, in the two-week period following the Zohar’s objection to the sale, Morrison Cohen produced and reviewed a massive amount of document production, defended multiple depositions, and then tried the case to its successful conclusion.
 
The Morrison Cohen team guiding Global through the sales process and the trial was led by Joseph T. Moldovan, Chair of its Business Solutions, Restructuring & Governance Department, Randi Mason, Co-Chair of the firm’s Corporate Department, and Danielle C. Lesser, Chair of the Business Litigation Department. The trial team consisted of Business Litigation Partners Y. David Scharf, Terence K. McLaughlin (who handled the depositions and witness at trial), and Aaron B. Lauchheimer. Corporate Partner Josh Saidlower and Corporate Associate Alyssa Pehmoeller assisted in the transaction.  Neil Glassman and Evan Miller of Bayard P.A. were co-counsel to Global.

Tilton and the Patriarch entities were represented by G. David Dean, Norman L. Pernick and Patrick J. Reilley of Cole Schotz PC and Monica K. Loseman, Randy M. Mastro, Mary Beth Maloney, Robert Klyman, and Michael Neumeister of Gibson Dunn & Crutcher LLP.
 
The case is In re: Zohar III Corp. et al., case number 1:18-bk-10512, in the U.S. Bankruptcy Court for the District of Delaware.

For more information, see The Wall Street Journal (“Bankrupt Zohar Funds Can’t Block Lynn Tilton’s Deal for Auto Supplier”) and Law360 (“Judge OKs Tilton-Tied Biz’s Ch. 11 Deal for Auto Parts Co.”).