A significant number of companies that file for bankruptcy don'tdisclose anything about their preparations for bankruptcy in publicfilings, according to the Wall Street Journal. Whilepreparing for a bankruptcy filing seems to constitute the type of“material” information the Securities and Exchange Commissionrequires companies to disclose to investors, in fact regulationsand court rulings don't mandate that companies let investors knowabout bankruptcy preparations. Disclosing such preparations couldmake the situation worse for a stressed firm, especially afinancial firm.

A Journal examination of the filings of 90 largepublicly traded companies that filed for bankruptcy between 2007and this April found that 29 didn't disclose that they were makingpreparations to file for bankruptcy. Some of the companies, likeLehman and MF Global, fell apart quickly, the Journal notes, sothat disclosure may not have been possible.

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