Companies in Chapter 11 must publicly report substantial financial information — indeed, more information should be reported or available publicly in Chapter 11 than outside of Chapter 11. This paper analyzes what information must be publicly reported or disclosed under the securities laws, the Bankruptcy Code and Bankruptcy Rules; what debtors do to minimize public reporting; and what creditors can do to get the public reporting they deserve.

Debtors May Stop Public Reports Under the Securities Laws.

In an August 2016 decision in the Aéropostale bankruptcy case,¹ the Bankruptcy Court for the Southern District of New York held that allegations of insider trading did not justify equitable subordination and were not “cause” to deny a credit bid. The decision helps bridge the gap between the treatment of insider trading allegations in bankruptcy court and their treatment everywhere else.

Borrowers, agent banks, syndicate members and secondary market purchasers incur, syndicate, sell and buy bank debt on the assumption that bank debt is not a “security.” However, a June 30, 2016, opinion in the General Motors preference litigation¹shows that such an assumption may no longer be valid, at least under the Bankruptcy Code.

Once a giant of the U.S. economy, the coal industry  now faces uncertain times due to lower global demand, a boom in domestic natural gas production, over- levered capital structures and stringent environmental regulations. This depressed environment has attracted the attention of certain distressed investors and alternative investment funds looking to capitalize from an eventual upswing in the coal industry.

Companies in Chapter 11 must publicly report substantial financial information — indeed, more information should be reported or available publicly in Chapter 11 than outside of Chapter 11. This paper analyzes what information must be publicly reported or disclosed under the securities laws, the Bankruptcy Code and Bankruptcy Rules; what debtors do to minimize public reporting; and what creditors can do to get the public reporting they deserve.

Debtors May Stop Public Reports Under the Securities Laws.

Borrowers, agent banks, syndicate members and secondary market purchasers incur, syndicate, sell and buy bank debt on the assumption that bank debt is not a “security.” However, a June 30, 2016, opinion in the General Motors preference litigation¹shows that such an assumption may no longer be valid, at least under the Bankruptcy Code.

Once a giant of the U.S. economy, the coal industry  now faces uncertain times due to lower global demand, a boom in domestic natural gas production, over- levered capital structures and stringent environmental regulations. This depressed environment has attracted the attention of certain distressed investors and alternative investment funds looking to capitalize from an eventual upswing in the coal industry.