Carl Icahn may buy enough of Reliance Group Holdings Inc.’s bonds to give him a say in how to run the 183-year-old insurer burdened by debt and bad underwriting, according to a report by Reuters news service.
A report released Wednesday said a federal appeals court ruled Tuesday, refusing to extend an order it imposed last week that blocked Icahn affiliate High River LP from buying up to $40 million of Reliance’s senior bonds, a move that would nearly double Icahn’s current stake. Should Icahn succeed in his efforts to obtain control of one-third of Reliance’s $291.7 million of bonds — about $97 million – he would be able to block any bankruptcy restructuring efforts he does not agree with.
Reuters reported that Icahn said he had received offers for about $20.2 million of Reliance’s bonds. The federal court ruled he may proceed with the tender after noon on Wednesday, sources reportedly told the news service. A spokesman for Reliance, Doug Morris, told Reuters “we are seeking for him to take further curative action so that the bondholders have as much information as possible.”
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