Seventeen minority investors are asking a Los Angeles court to pause Industrial Realty Group’s planned reverse merger with Sachem Capital Corp., arguing the deal could move IRG’s most valuable assets before their separate investment dispute is resolved.
The investors, some of whom have held stakes in IRG Master Holdings for as long as 16 years, say the transaction would leave them with little practical recourse. In a Bisnow report, the group’s arbitration claims were described as seeking more than $350 million in damages, along with a constructive trust over funds, profits and proceeds allegedly under IRG’s control.
The proposed transaction would place 98 industrial assets into a new public real estate investment trust. A SEC filing says Industrial Realty Group Global would contribute its interest in IRG Master Holdings and its subsidiaries to a new operating partnership controlled by Sachem, with the transaction expected to include a 20-to-1 reverse stock split and a later name change.
The combined company would be called IRG Realty Trust and have an implied enterprise value of roughly $3.4 billion, according to the companies’ announcement. IRG is expected to hold about 94.1% of the combined company’s equity, while existing Sachem shareholders would hold about 5.9%, subject to shareholder approval and other closing conditions.
The Clock Is The Core Dispute
The lawsuit is centered less on whether the merger exists than on whether it closes before the investors get a decision in arbitration. The arbitration trial is scheduled for April or May 2027, while the merger is expected to close by the end of 2026; a judge also denied the investors’ request to accelerate the court case, with the next hearing scheduled for February, Bisnow reported.
The investors argue that transferring approximately $2.9 billion in industrial real estate into the new public entity could place those assets beyond the reach of any eventual arbitration award. Attorneys for the investor group and Sachem did not respond to Bisnow’s requests for comment, while a representative for IRG founder Stuart Lichter, who is named in the suit, could not be reached.
Why The Deal Structure Matters
A reverse merger allows a private operating company to gain access to public markets through an existing public company rather than completing a traditional initial public offering. The SEC investor bulletin says the structure can be faster and less expensive than an IPO, while still requiring public-company reporting through SEC filings.
That structure is now at the center of a high-dollar timing fight in Los Angeles. The investors’ allegations have not been adjudicated, and the proposed merger remains subject to the court proceedings, shareholder approval and the other conditions outlined in the companies’ filings.
