April 30, 2007

“Disclosure Rules Alter Chapter 11 Hedge Fund Strategies?” The New York Law Journal

D. Tyler Nurnberg, partner in the Business Reorganization and Creditors' Rights Department in the Chicago office, co-authored an article in the April 30, 2007 issue of The New York Law Journal titled "Disclosure Rules Alter Chapter 11 Hedge Fund Strategies?". The article is a general discussion respecting two Bankruptcy Court orders that address the recent conflicts over disclosures required of unofficial or ad hoc committees in chapter 11 cases. Banding together as an unofficial or ad hoc committee of bondholders or shareholders is a common strategy utilized by hedge funds and other distressed investors looking to influence the direction of a chapter 11 case. At issue is the extent to which these investors must publicly disclose trading data, consisting of their relative holdings, the dates they acquired their positions and the price they paid. Hedge funds and distressed investors claim that requiring the disclosure of trading data will have a "chilling effect" on the participation of these sophisticated investors, who make positive contributions and bring liquidity to the chapter 11 process.



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