(Reuters) – High River LP, owned by activist investor Carl Icahn, has sued real estate broker Realogy Corp over a debt deal announced last month, the New York Post said on Wednesday.
Realogy, which owns real estate brokerages including Century 21, ERA and Coldwell Banker plans a debt exchange to stave off default of some of the bonds coming due, the paper said.
But Icahn, who owns Realogy bonds through High River, thinks the deal unfairly pushes his bonds to the back of the repayment line, according to a lawsuit filed in a Delaware court, the paper said.
Under the new debt plan, Realogy, which is owned by U.S. buyout firm Apollo Management, would exchange about $1.1 billion worth of its bonds at a roughly 50 percent discount for the new offering, the paper said.
In return for accepting the discount, debt holders would get benefits such as moving up in line when it comes to getting paid if the company goes bankrupt, according to the paper.
The High River suit accuses Realogy’s management of simply delaying “what now appears to be the inevitable failure of Realogy,” according to the complaint, the paper reported.
Realogy could not be immediately reached for a comment. (Reporting by Sakthi Prasad in Bangalore; Editing by David Holmes)