A group of large institutional bondholders has hired Akin, Gump, Strauss, Hauer & Feld, said Daniel Golden, head of the law firm's financial restructuring practice.

Two institutional bondholders have filed lawsuits against RJR Nabisco Inc. over the decline in value of their bonds that occurred after a management group announced it was considering a leveraged buyout of the consumer company.

The group is called the Barings 9 1/4% Perpetual Noteholders Action Group, a collection of institutional bondholders and small investors who lost a combined $:100 million ($156 million) when Barings collapsed in February.

Three large institutional bondholders said yesterday that though the proposal would require them to make an additional investment in Macy to buy stock, they liked the plan because they believed Macy stock would rise after it emerges.

And Wall Street is scrambling to put together new bond deals that offer enough takeover protection to satisfy a newly defiant breed of institutional bondholders.

In return, the state will pay hundreds of institutional bondholders what it estimates to be the loss in value of their bonds as a result of the action - $17 million to $20 million.

Whatever the terms of the new proposal, eight institutional bondholders plan to pursue their lawsuits, which are pending in United States District Court in Baltimore.

The institutional bondholders contend that Marriott committed securities fraud when it sold $400 million of bonds last April without informing investors of its intentions.

Although both companies said this was by mutual agreement, it is widely believed that Merrill Lynch had been under pressure from institutional bondholders.

Officials confirmed that several variants are under discussion, all of which involve the fund acting as an insurer or guarantor for a slice of the losses - around 20% - that could be suffered by institutional or private bondholders.