Hedge Funds Challenge Intralot Restructuring in New York Court

Intralot SA’s attempt to stave off defaulting on $250 million of notes due September has been challenged by some holders of its other bonds, who argue the deal would leave them “with nothing” in the event of insolvency.

Funds run by Northlight Group LLP and Bardin Hill Investment Partner LP have filed a suit in a New York court alleging the proposed restructuring would rob them of the “crown jewel” of Intralot’s business if the company collapsed, according to legal filings.

The deal would see Intralot’s U.S. business, which accounts for a large chunk of the company’s earnings, pledged ...