A group of hedge funds that holds Northwest Airlines Corp. stock is asking the bankruptcy court to delay a ruling on the company’s request to conduct a rights offering to raise up to $750 million to fund its bankruptcy exit.
The hedge fund group, which formed a committee in the airline’s Chapter 11 case, said the proposed rights offering doesn’t reflect Northwest’s fair market value because the company didn’t offer other legacy carriers or “strategic investors” the right to purchase the equity.
“Though styled as a rights offering, the transaction has the same economic effect as a straight sale of equity,” the group, which calls itself the ad hoc committee of equity security holders, said in court papers filed Monday.
