The stars are aligning against 'Diva of Distressed' Lynn Tilton

A lawsuit filed against Patriarch Partners founder Lynn Tilton is starting to line up with the government's own case against her.

The claim investors are making sounds pretty mundane, but it's very serious: Among other things, Tilton being accused of misleading backers about the fund's accounting standards.

Tilton's focus on investments struggling companies has earned her the title `Diva of Distressed.' The claims are over three debt funds named the Zohar funds.

Norddeutsche Landesbank Girozentrale and Hannover Funding Co. filed the lawsuit in the Supreme Court of New York on Monday.

The suit includes wide-ranging allegations, but one of most important and technical refers to the way in which the accounts for the debt funds were prepared.

According to the suit, Tilton told the investors that they were prepared in "in accordance with US GAAP," meaning the "Generally Accepted Accounting Principles" under which many businesses prepare their financials.

But filings with the SEC indicate otherwise. Here's the filing from the SEC's website.

This very issue is at the center of separate fraud charges filed by the SEC. The SEC said in March that "Tilton repeatedly and falsely certified that the financial statements were prepared in accordance with Generally Accepted Accounting Principles."

It's not just the allegations that are lining up. A lawsuit on Monday from one of Tilton's investors in the Zohar funds appears to conflict with statements her firm provided to regulators.

An employee from Norddeutsche Landesbank Girozentrale is due to testify against Tilton in the SEC case, according to a copy of the witness list dated August 7.

The SEC has been stayed, but is expected to proceed.

The witness says the Nord's employee will "testify regarding [Nord's] investment in the Zohar fund(s), communications regarding the investment, relationship with Patriarch, their understanding of the investment [and] any interaction with Tilton or other Patriarch employees."

Tilton, earlier this year, went on a media blitz in the wake of the SEC's charges and tried to challenge the fraud charges on constitutional grounds.

"We deny these baseless allegations in the strongest possible terms and we intend to vigorously defend ourselves in court," according to a spokesperson for Patriarch Partners. "We particularly take great umbrage at plaintiffs' allegations that Patriarch has at any time put its own interests ahead of the interests of the Zohar note holders or the portfolio companies and their employees."

The SEC did not respond to a request for comment by publication time.