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Court Denies Hedge Funds' Motion To Seal Confidential Trading Information

March 12, 2007

Members of the ad hoc shareholders’ committee in the Northwest Airlines reorganization case lost their attempt on March 9 to seal “the amounts of claims or interest [they] owned …, the times when acquired, the amounts paid therefor, and any sales or other disposition thereof.” So held Judge Allan L. Gropper of the United States Bankruptcy Court for the Southern District of New York in In re Northwest Airlines Corp., Case No. 05-17930, Docket No. 5220, slip op. (Bankr. S.D.N.Y. Mar. 9, 2007), following his earlier ordering of the disclosure of trading details. 2007 WL 609214, at *2, *4 (Bankr. S.D.N.Y. Feb. 26, 2007). The bankruptcy court has now ordered sensitive trading information to be made part of the public record, possibly discouraging hedge funds and other institutional investors from serving on any kind of committee in a reorganization case.