In re Northwest Airlines Corp. (Northwest II)
United States Bankruptcy Court for the Southern District of New York
363 B.R. 704 (2007)
- Written by Solveig Singleton, JD
Facts
Northwest Airlines Corporation (Northwest) (debtor) filed for Chapter 11 bankruptcy. The bankruptcy court required certain equity security holders who held a total of 27 percent of Northwest’s stock to form an ad hoc committee (the equity committee). The equity committee members were required to file disclosure statements under Bankruptcy Rule 2019 (Rule 2019). The equity committee members asked for the portions of the disclosure statements revealing their purchases and sales of Northwest securities to be filed under seal. Northwest, a creditors’ committee, and an intervenor opposed the request. In an earlier case, the Second Circuit Court of Appeals had ruled that confidential commercial information in a Rule 2019 disclosure statement could be filed under seal if disclosing the information could give competitors an unfair advantage. Members of the equity committee argued that disclosure would reveal the cost basis of the members’ investments, which would place the members at a disadvantage if they sought to sell the securities to third parties. The members also argued that they were not fiduciaries of other shareholders.
Rule of Law
Issue
Holding and Reasoning (Gropper, J.)
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