(Bloomberg) -- A group of InterCement Participacoes SA bondholders filed a complaint against Banco Bradesco SA, claiming the Brazil lender failed to disclose a conflict of interest that ultimately gave it an edge in the cement maker’s debt restructuring.  

The investors claim that Bradesco, an underwriter of InterCement’s dollar notes issued in 2014, hid the fact that its preferred shares in the company included a put option, according to documents filed in the New York State Supreme court Friday. 

Those options gave Bradesco more leverage in InterCement’s debt restructuring, putting the lender ahead of other bondholders, the suit claims. The bank will be compensated as much as 2.2 billion reais ($381 million) in the debt rework, pushing the recovery value to as low as 45% for remaining bondholders, the group claims. 

The group filing the complaint includes Redwood Capital, Moneda Asset Management and Contrarian Capital. InterCement and Bradesco declined to comment on the lawsuit, which was first reported by The Wall Street Journal. 

The Brazilian cement maker reached an agreement with some creditors to begin an out-of-court restructuring of about 21.9 billion reais in debt in September. The ad-hoc group of bondholders doesn’t accept and continues to oppose the plan, the document says.

InterCement was hit by high interest rates in the South American country, its biggest market, and efforts to unload African assets weren’t enough to allay fears over its capital structure, deemed “unsustainable” by ratings firms.

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