New York Hedge Fund Cries Foul Over Northwest Plan

Jan 30 2007 | 10:22am ET

New York-based hedge fund manager Owl Creek Asset Management has a few words for bankrupt Northwest Airlines.

In a securities filing, the firm, which holds a 5% stake in Northwest, objected to the airline’s proposed reorganization, saying it unduly rewards creditors at shareholders’ expense.

“Your stockholders are in favor of an expeditious reorganization, but only a fair one, and the directors’ efforts must be focused on preserving and maximizing stockholder value under these circumstance,” the firm wrote. Owl Creek, which said the plan will “overpay creditors and undersell” the company, said it represented an ad-hoc equity committee accounting for some 30% of Northwest shares.

Owl Creek suggested that Northwest “should be pursuing the potential of consolidation with other legacy carriers.”

Northwest fired back in a statement, saying, “Contrary to Owl Creek’s assertions, the company’s board of directors has considered all realistic and prudent options in order to maximize the value of the company.”


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Saxby: Not All EBITDA Is Created Equal

Nov 30 2017 | 8:02pm ET

Record levels of dry powder are driving competition among private equity firms to...