THE WHAT? A Delaware Chancery Court has ruled that financier Lynn Tilton wrongly wrested control of cosmetics brand Stila by denying a Zohar fund its right to replace her as manager.
THE DETAILS The make-up brand took equity financing from the now-bankrupt Zohar funds but unilaterally amended its limited liability agreement in 2017, granting herself corporate governance in exchange for a US$10 million consideration.
THE WHY? The Zohars argued that the amendment was not valid as it required their consent, which had not been granted. The court agreed, ruling that Tilton ‘did not have the authority to amend the LLC agreement to strip Zohar of its right to remove and replace the manager’.