Maiden Holdings (MHLD) was 38% higher at market close Tuesday, after the reinsurance firm disclosed two of its bondholders filed suit last week in a bid to force it to redeem long-term notes.

The plaintiffs, WUSO Holding and 683 Capital Partners, are investment managers owning a combined $56.3 million of Maiden Holdings' 7.75% senior unsecured notes maturing in 2043. The complaint filed in the New York state supreme court contends Maiden triggered provisions in the indenture for the notes requiring the company to redeem all $152.5 million of the 30-year notes issued in 2013 by selling its former Maiden North America subsidiary in November 2018.

The company did not address specific contentions of the litigation in its filing, but said it "believes it has substantial procedural and substantive defenses to the asserted claims and it intends to vigorously defend against these claims."

The disclosure also follows Maiden announcing Monday its plans to merge with Kestrel Group through a newly formed public company. The deal values Kestrel at about $167.5 million.

Price: 1.70, Change: +0.47, Percent Change: +38.13