Increasing Disclosures Would Chill Claims Trading

Category: Business

Investors purchase claims in bankruptcy proceedings to (i) earn a profit from the difference between the claim’s purchase price and the expected distribution; (ii) gain influence in the plan voting process, proposing a plan or obtaining a control position in one or more creditor class; or (iii) strategically invest in the debtor to then convert their debt to equity in the reorganized debtor or to acquire the debtor’s assets.