REID COLLINS & TSAI LLP OBTAINS $12 MILLION SETTLEMENT FROM FORMER DURA AUTOMOTIVE EXECUTIVES IN BANKRUPTCY-RELATED LAWSUIT
- National trial firm Reid Collins & Tsai LLP represents the Chapter 7 Trustee for the estate of Dura Automotive Services, LLC in lawsuit against former Dura executives Lynn Tilton and Kevin Grady.
- Lawsuit alleges claims for breach of fiduciary duty against both Tilton and Grady including the failure to pursue a sale of the company to interested third parties.
- Settlement terms include $12 million payment, achieved before case had even entered discovery.
AUSTIN – September 12, 2023 (PRNewswire) – On Friday, the U.S. Bankruptcy Court for the District of Delaware approved a $12 million settlement of a civil litigation pursued by national trial firm Reid Collins & Tsai LLP (“Reid Collins”) on behalf of Jeoffrey Burtch, the Chapter 7 Trustee (“Trustee”) for the estate of Dura Automotive Services, LLC (“Dura”) against former Dura executives, including Lynn Tilton.
In April 2022, Reid Collins filed suit on behalf of the Trustee against Tilton and another former Dura executive, Kevin Grady. Dura, an automotive parts manufacturer, was a portfolio company of a group of funds called Zohar, also managed by Tilton.
The Trustee’s complaint asserts claims for breach of fiduciary duty against both Tilton and Grady for, among other things, failing to pursue the sale of the company to a group of interested third parties and instead pushing Dura into bankruptcy in an effort to allow Tilton to purchase the company herself at a sharp discount. The settlement was achieved quickly, before active discovery in the case had begun, even before Defendants’ motions to dismiss had been argued and adjudicated.
Reid Collins partner Craig Boneau, who leads the prosecution of the lawsuit, on the settlement’s significance:
“The settlement is an excellent result for the Trustee in a case that represents an important challenge to a common tactic designed to improperly take assets – pushing a company towards or into bankruptcy when a viable sale is possible. Our team expertly navigated numerous factual and legal complications related to Tilton’s Zohar funds and their parallel bankruptcy, and ultimately brought about a successful resolution quickly and efficiently.”
The case is captioned Jeoffrey L. Burtch, as chapter 7 trustee of the estates of Dura Automotive Systems Cable Operations, et al. v. Lynn G. Tilton and Kevin Grady, No. 2022-0343 (Court of Chancery, State of Delaware).
Press coverage of the settlement:
Prior results do not guarantee a similar outcome.