Rithm Capital Corp.'s plan to acquire Sculptor Capital Management hit another hurdle Wednesday when four former executives sued the hedge fund firm, alleging the transaction would wipe out more than $127 million of shares they own.

Close to 100 employees including the co-founders of Follow Up Boss will transition to the acquiring company.

The acquisition of the mortgage servicer has costs, but it'll give the company offsetting efficiencies of scale, executives said in an earnings call Tuesday.

The support of Och potentially puts an end to a bidding war that pitted Sculptor against hedge fund founder Boaz Weinstein and a group of billionaires, who most recently said they would pay $13.50 for the embattled hedge fund firm.

The company posted third-quarter profits of $194 million but gave no details about a potential split of its mortgage business.

Saba Capital Management's Boaz Weinstein and his group of billionaire backers again raised their bid for Sculptor Capital Management Inc. 

As part of its breakup fee, the Old Greenwich, Connecticut REIT will come away with an over 6% interest in its New York counterpart.

Och, who left New York-based Sculptor in 2019, said Tuesday in a statement that he wants a Delaware judge to halt the buyout until a rival group led by Saba Capital Management's Boaz Weinstein is able to present its higher bid to shareholders.

"We are not selling and giving up what we have worked 27 plus years to build," founder Steve Jacobson wrote.

But the deal - even if it does not close - will have little effect on the outlook for the REIT, analysts for Keefe, Bruyette & Wood said.