Reliance Agrees to Restructuring Pact

Reliance Group Holdings Inc has agreed with some of its debt holders to a restructuring plan that would send it into bankruptcy court, the Wall Street Journal reported Friday. Pennsylvania insurance regulators are reviewing the plan, and the company would like their approval, although it isn’t required, the paper said.

Even if regulators do approve the plan, it could face complications from financier Carl Icahn, who holds a significant amount of the New York-based firm’s debt, the paper said. Icahn is against an integral part of the plan – hiring two Aon Corp units to wind up the remainder of Reliance’s insurance operations – the paper reported.

On Monday, Icahn offered to buy about $61 million of Reliance’s bonds (see related story). Bondholders have been urged by Reliance to reject the offer.