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Distressed investors call for more transparency from companies - WSJ

Monday, January 06, 2014

Komfie Manalo, Opalesque Asia:

Distressed debt investors, including bondholders and other creditors of companies close to bankruptcy are calling for transparency and asking troubled firms to disclose information after talks stall or stop.

In a report, The Wall Street Journal says such investors are pushing for transparency with the aim at minimizing accusations they are using inside information.

Hedge funds and distressed debt investors are prohibited from trading while confidential talks with distressed firms are ongoing, to ensure they will not be using private financial information they can gather during the negotiations, says the Journal. But they could trade after the talks end if company information is released. The Journal cites Oleo e Gas Participacios SA, then know as OGX, which released a 90-page pack of company information 36 hours before filing for bankruptcy.

"The nondisclosure agreements are now much more heavily negotiated than they were in the past in order to cover the waterfront...so that the investment firms can be certain that they're able to trade at the end of the periods," Damian Schaible, a lawyer in Davis Polk & Wardwell LLP's insolvency and restructuring group, told the Journal. "That's the new world but that is so radically different from the way it used to be."

ON a separate note, the ......................

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