Billionaire Leon Black wants to go to the mat with America’s largest mattress maker.
Black’s Apollo Global Management — together with investment firms Angelo Gordon and Gamut Capital — is gearing up to sue Serta Simmons over its efforts to lower its $2.4 billion debt stack through a refinancing because it never agreed to the deal, The Post has learned.
Legal papers will be filed as soon as this week in New York State Supreme Court seeking injunctive relief to stop the refinancing, which comes as the privately held mattress maker struggles with sagging sales made worse by the coronavirus, sources said.
The defendants will include Serta Simmons, its private equity owner Advent International and investment firms Eaton Vance, Invesco and Credit Suisse Asset Management, the sources said.
At issue is Serta Simmon’s announcement this week that it has come to a deal with a majority of its senior and junior lenders to borrow an additional $200 million while also reducing its massive debt pile by $400 million through a refinancing.
Apollo, Angelo Gordon and Gamut — who recently bought about one-third of Serta’s $1.95 billion in senior debt at a deep discount — are expected to claim that they didn’t agree to the deal in violation of the company’s credit agreements.
Companies normally require all senior lenders to agree to any loan modifications, including a refinancing and lawyers for the angry investors plan to argue that if allowed to proceed, the refinancing will endanger the $2 trillion credit market by allowing companies to pit senior lenders against each other when angling for better loan terms or more capital.
“This could really upend the $2 trillion banking market,” a source close to the case said.
Serta Simmons didn’t immediately return a request for comment. Advent declined to comment.