UPDATE 1-Investor Och and others sue Sculptor to halt planned deal with Rithm

(Adds Sculptor's response to the lawsuit in paragraph 5)

By Svea Herbst-Bayliss

NEW YORK, Oct 17 (Reuters) - Sculptor Capital Management founder Dan Och and other former executives on Tuesday sued the hedge fund, its directors and suitor Rithm Capital Corp , seeking to allow shareholders to hear details of a higher rival offer.

The suit, filed in Delaware Court of Chancery, seeks to stop Rithm's planned $676 million acquisition until a rival bidder, led by fund manager Boaz Weinstein, is freed from its standstill obligation and can present its offer fully to shareholders and the hedge fund's clients.

Sculptor last week said it was accepting Rithm's sweetened offer of $12 a share. It is below the $13 a share offer that Weinstein and a group of billionaire fund manager backers, including Bill Ackman, Marc Lasry and Jeff Yass have said they are ready to pay.

The lawsuit says that much of the back and forth on bids revolves around the future of Sculptor chief investment officer Jimmy Levin, who was groomed by Och years ago as his eventual successor before Och changed his mind.

Sculptor Capital Management's Special Committee of its Board on Tuesday called the lawsuit "baseless." "Dan Och’s complaint is replete with materially misleading statements," it said.

Rithm proposes to keep Levin in his job while Weinstein has said he would not do so.

"The proposed merger reflects just the latest step in a long line of actions by which the directors have demonstrated that they are beholden to Mr. Levin and place his interests over the stockholders' interests," Och's lawsuit said.

The case is Och v. Engel, 2023-1043, Delaware Chancery Court (Wilmington). (Reporting by Svea Herbst-Bayliss; Additional reporting by Shubhendu Deshmukh; Editing by Rod Nickel; Leslie Adler and Muralikumar Anantharaman)