(Bloomberg) -- Invesco lost a bid to regain control of Robertshaw after the firm was stripped of its power to steer the restructuring of the troubled appliance parts maker by rivals Bain Capital, Eaton Vance Management and Canyon Capital Advisors.

Judge Christopher Lopez ruled Thursday that Bain, Eaton Vance, Canyon and Robertshaw’s private equity owner One Rock Capital Partners can continue steering the company’s Chapter 11 restructuring. The ruling is a setback to Invesco, which sued to block a December debt deal — devised by the rival lenders — that effectively pushed Invesco out of the restructuring.

Lopez ruled that Bain, Eaton Vance, Canyon and One Rock didn’t breach Robertshaw’s underlying credit agreement and remain the company’s “required lenders,” which give them the right to sway the appliance parts maker’s restructuring. 

Robertshaw in an emailed statement said the ruling is “a major milestone” in its restructuring. The company is seeking bankruptcy court permission to sell itself to Bain, Eaton Vance, Canyon and One Rock in exchange for debt relief.

Lopez added, however, that Robertshaw itself violated its credit agreement when it undertook the disputed transactions. Invesco can seek monetary damages from the company because of the breach, he said.

A lawyer for Invesco, Andrew K. Glenn, said in an emailed statement that “we are gratified” the court found the transactions breached the credit agreement. “We look forward to vindicating our client’s rights and will be pursuing all available alternatives for an appropriate remedy,” he said.

The decision caps a multiday bankruptcy trial that included testimony from Bain and Invesco managing directors and revealed internal messages describing officials’ unfiltered reactions to the transaction. Robertshaw, which filed bankruptcy in February, has said it needs to resolve the Invesco dispute in order to emerge from Chapter 11.

The disputed transaction involved Robertshaw repaying senior debt owned by Invesco, an action that snatched away the investment firm’s status as required lender. Invesco argued the transaction wasn’t permitted by Robertshaw’s underlying credit agreement.  

Bain, Eaton Vance, Canyon, Robertshaw and One Rock said the payment was structured to comply with the credit agreement. The firms backing the deal also said it prevented Robertshaw from being rushed into Chapter 11 by Invesco in early January.

The case is Robertshaw US Holding Corp., number 24-90052, in the US Bankruptcy Court for the Southern District of Texas.

--With assistance from Reshmi Basu.

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