NEW YORK (Bloomberg) — American International Group Inc., the world's biggest insurance company, sued Bermuda-based Tyco International Ltd. in effort to stop a plan by the company to buy back $6.6 billion of debt.Bondholders led by AIG have claimed that Tyco is offering about $95 million less than what they are entitled to under contracts governing the terms of the securities.

The suit was filed this week in federal court for the Southern District of New York. A copy was sent yesterday by Paul, Weiss, Rifkind, Wharton & Garrison LLP, which represents Tyco's bondholders. Andrew Rosenberg, a lawyer at the firm in New York, declined to comment.

Investors making up more than 60 percent of Tyco's bondholders on May 7 rejected the tender, Rosenberg said at the time. Tyco wants to buy the debt back as part of a plan to split into three companies. Rosenberg has said bondholders would object to an attempt by the company to go through with the break up without their permission.