New York – The contentious Northwest Airlines Corp. (NWACQ.PK) bankruptcy case is a new battleground in a larger war between hedge funds and distressed companies that will only widen, experts say.
The No. 5 U.S. airline wants to cancel existing stock and issue new equity to creditors as part of plan to exit Chapter 11 bankruptcy this spring, less than two years after it filed.
But a group of 13 hedge funds, which collectively hold 19 million shares, or about 30 percent, are fighting the plan, contending Northwest’s equity has value despite the company’s assertions to the contrary.
