## Facts

- Northwest Airlines Corporation and affiliates filed Chapter 11 cases and operated as debtors in possession.
- Counsel appeared for an ad hoc committee of equity security holders composed of institutional common stockholders.
- The committee filed a verified Bankruptcy Rule 2019 statement identifying its members by name but disclosing only aggregate holdings: total shares of common stock and total claims, with an indication that some positions were acquired after the petitions.
- The statement did not provide member-by-member amounts, acquisition dates, purchase prices, or subsequent dispositions.
- The debtors moved to compel a supplemental Rule 2019 statement with the individualized information specified in the rule.
- The committee opposed, arguing confidentiality concerns and invoking 11 U.S.C. § 107(b) as a basis to limit public disclosure.

## Issues

1. Whether an ad hoc equity committee’s aggregate disclosure satisfies Bankruptcy Rule 2019’s requirement to disclose, for each member, the nature and amount of claims or interests, the times acquired, the amounts paid, and any dispositions.
2. Whether 11 U.S.C. § 107(b) permits withholding or requires sealing of information that Rule 2019 requires to be disclosed.
3. Whether Rule 2019 applies to an ad hoc equity committee and its counsel appearing in the case as a committee representing multiple equity holders.

## Decision

- The court granted the debtors’ motion to compel supplemental disclosure.
- The court held the committee’s Rule 2019 statement was inadequate because it did not include member-specific information required by the rule.
- The court held Rule 2019 applies to an ad hoc committee of equity security holders that appears through counsel to act collectively in the case.
- The court rejected the contention that § 107(b) mandates sealing of Rule 2019 information upon request and found generalized confidentiality concerns insufficient to override the rule’s disclosure requirements.
- The court ordered the committee to file a supplemental Rule 2019 statement disclosing, for each member, the required details on holdings, acquisition timing, consideration paid, and dispositions.

## Legal Principles

- Bankruptcy Rule 2019 requires verified, member-by-member disclosure from any committee (and its counsel) representing more than one creditor or equity security holder, including the nature and amount of each member’s claims or interests, when acquired, what was paid, and dispositions.
- Aggregate disclosures do not satisfy Rule 2019 when the rule calls for individualized information sufficient to identify who is acting through the committee and with what economic stake.
- Rule 2019 applies to unofficial or ad hoc committees that seek to participate and be heard as a collective body in a Chapter 11 case.
- Section 107(b) is a limited exception to public access and does not operate as a blanket override of Rule 2019; a party seeking protection must make a specific showing that the information fits within § 107(b)’s categories.
- A court may condition a committee’s continued participation on compliance with Rule 2019’s disclosure obligations.

## Conclusion

The bankruptcy court required an ad hoc equity committee to provide individualized Rule 2019 disclosures about each member’s positions and trading details, holding that aggregate reporting was insufficient and that § 107(b) did not automatically justify withholding or sealing information mandated by the rule.


In re Northwest Airlines Corp., 363 B.R. 701 (Bankr. S.D.N.Y. 2007)