(Bloomberg) -- Paul Singer’s Elliott Management Corp. is locked in a new battle with some of the most prominent credit investors, with one of its biggest private equity bets at stake.

Maneuvers by Elliott, along with Siris Capital Group, to save their control of global bookings operator Travelport LLC are facing a stern challenge from a lender group that is threatening to declare a default and commence litigation, according to a letter to the company reviewed by Bloomberg News. The details of the credit agreement and its terms are private.

The owners of Travelport, acquired by Elliott and Siris last year, shifted intellectual property estimated to be worth more than $1 billion to an unrestricted subsidiary. That would put it out of reach of its current lenders and could help raise desperately needed cash, it informed them earlier this month.

That transaction is reminiscent of the J. Crew Group asset grab that sparked tension and litigation from furious lenders at the time. Now, Travelport lenders led by GSO Capital Partners, Canyon Partners and Mudrick Capital Management are demanding that the company immediately unwind the transaction, according to the letter. The group has the support of holders representing more than 80% of the company’s $2.8 billion first-lien loan.

About three quarters of the first-lien lenders have signed a so-called cooperation agreement that binds them to act together whether supporting or opposing any transaction. Such a pact could prevent the company from trying to win over creditors in individual negotiations, people said.

The lender group is also countering Travelport’s debt-raising plans with one of its own. The group will throw in new capital and seek a more senior role in the capital structure, as long as the company unwinds its decision to shift assets. Representatives for Travelport and Siris Capital declined to comment. Elliott didn’t immediately respond to requests for comment.

The lenders are working with Akin Gump Strauss Hauer & Feld LLP and PJT Partners, the people said. Representatives for those firms declined to comment.

Lenders’ Ire

Elliott has long crafted an image as one of the most aggressive activist investors. Siris Capital, a smaller private equity firm based in New York, has relied on credit markets to help carry out many of its buyout deals and is also facing the ire of lenders.

The jousting comes after the coronavirus pandemic battered Travelport’s business and cast doubt on anticipated revenue from a $1.7 billion asset sale. The company was set to complete the sale of two of its payments businesses to technology firm Wex Inc. before Wex said May 7 that the pandemic had a “material adverse effect on their businesses” that legally released it from the deal. Four days later, Elliott sued in the U.K. in an effort to force Wex to complete the deal.

A lengthening roster of companies that agreed to buy hotel, retail and other assets before the pandemic are now fighting in court to back out of those transactions.

“ENett, Travelport and Optal reject Wex’s attempt to walk away from its binding agreement,” Travelport and its subsidiaries said in a May 7 response to the Wex announcement. The purchase agreement, which was executed Jan. 24, “expressly excludes the effects of a pandemic from the definition of material adverse effect,” they added.

(Updates with details of creditor pact in fifth paragraph.)

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