NEW YORK (Reuters) – A Delaware chancery court judge on Thursday ruled in favor of investor Carl Icahn’s High River LP in part of its challenge to a $1.1 billion debt deal proposed by real estate broker Realogy Corp.
“If Realogy wishes to engage in the proposed transaction, it would need to obtain agreement from the required number of its bank lenders to amend or waive certain provisions of the credit agreement,” Judge Stephen Lamb wrote in his opinion.
High River, together with Bank of New York Mellon, acting as bond trustee, sued Realogy Corp earlier in December, claiming the deal would unfairly push its senior bonds to the back of the repayment line.
The judge’s opinion said that consummation of the deal without the granting of certain liens to the Senior Toggle Notes would breach an agreement. The court did not rule on allegations that the deal would constitute a “fraudulent transfer”.
Realogy, which owns real estate brokerages including Century 21, ERA and Coldwell Banker, is owned by U.S. buyout firm Apollo.
“We are very pleased with this result,” Keith Schaitkin, deputy general counsel to the Icahn companies, said in a telephone interview.
“We always felt very strongly that our legal position was correct. Private equity owners cannot disadvantage the debt holders in their companies in an effort to save themselves.” (Reporting by Megan Davies and Paritosh Bansal)