(Bloomberg) -- A group of Adler Group SA bondholders escalated a fight with the embattled landlord, urging management of a subsidiary to quit after a recent property deal that the investors say could make it harder for them to get their money back.

The creditors, which include hedge funds such as GLG Partners that hold bonds issued by Adler Real Estate, wrote in a letter to the unit’s management they’re concerned the transaction wasn’t done “at arms length.”

The deal, in which Adler Real Estate paid its parent 326 million euros ($339 million) for a portfolio of Berlin flats, drains the subsidiary’s liquidity and could threaten the repayment of a 500 million euro bond that’s due in less than 12 months, they said in the letter, sent last night by their law firm and seen by Bloomberg News.

A representative for Adler Group declined to comment.

Different creditor groups have been jockeying for the best position to recoup their money after an Adler-initiated review by KPMG couldn’t refute all short-seller allegations. Chairman Stefan Kirsten said in a newspaper interview this week that winding up the company is one possible outcome of a strategic review started after its auditor quit and financial watchdog BaFin said it was investigating the firm.

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Adler has more than 7 billion euros in outstanding debt, issued in part by subsidiaries such as Adler Real Estate that were standalone companies before they were combined in a controversial three-way merger two years ago. Adler Real Estate raised some 1.1 billion euros of bonds before the deal.

Kirsten, in the interview with Boersen-Zeitung, said his goal was to bundle income-producing assets within Adler Real Estate and shift liquidity to the parent company level. Adler also announced that it would squeeze out the minority shareholders of the real estate unit, a plan seen as facilitating cash transfers within the company.

Kirsten dismissed bondholder concerns over cash transfers within the group, saying he had a responsibility to all stakeholders and not just to a particular group.

The letter now sent by law firm Kirkland and Ellis says Adler Real Estate should consider appointing independent directors to the board, or at the very least seek independent legal advice.

It also asks the company to explain publicly what assets have been sold by and to whom, what information about the assets the subsidiary received from the parent ahead of the sale, and which advisers were involved in due diligence. Creditors also want to know who instructed the valuation of the assets and how the company plans to address the upcoming maturities. 

If their demands aren’t met, they said they would consider their legal options.

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