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Icahn sues Realogy(Century21, ERA and Coldwell Banker over debt deal

December 11, 2008

The High River suit accuses Realogy’s management of simply delaying “what now appears to be the inevitable failure of Realogy,”

NEW YORK (Reuters) – High River LP, a firm owned by activist investor Carl Icahn, has sued real estate broker Realogy Corp over a debt deal announced last month.Realogy, which owns real estate brokerages including Century 21, ERA and Coldwell Banker, plans a debt exchange to stave off default on some of the bonds in the debt deal, according to the lawsuit, first reported by the New York Post. Realogy said the bonds will come due in 2014 and 2015.

But Icahn, who owns Realogy bonds through High River, thinks the deal unfairly pushes his senior bonds to the back of the repayment line, according to the lawsuit, filed in a Delaware court.

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 Post 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 Post.

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.

(Reporting by Sakthi Prasad in Bangalore; Additional reporting by Phil Wahba in New York; Editing by David Holmes and Brian Moss)


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