Yahoo Inc is seeking to conceal large portions of a shareholder lawsuit alleging the internet company's board improperly thwarted Microsoft Corp's $US47.5 billion ($A50.6 billion) takeover offer.
In a letter sent on Friday to the judge overseeing the case in Delaware, a lawyer for the shareholders argued Yahoo is trying "to whitewash embarrassing documents" because the company thinks the information will damage the board's efforts to repel a challenge by activist investor Carl Icahn.
Angered by the board's handling of the Microsoft bid, Icahn has nominated an alternate slate of candidates to oppose Yahoo's 10 current directors - including chief executive Jerry Yang - at the Sunnyvale-based company's July 3 annual meeting.
Yahoo is trying "to sanitise the public record and maintain a cloak of secrecy regarding unflattering evidence of breach of fiduciary duty," shareholder attorney Joel Friedlander wrote in a letter to Chancellor William B Chandler.
The redacted documents include information about an employee severance plan that Yahoo adopted shortly after Microsoft made its initial bid on January 31 and notes about a conversation between Yang and Microsoft CEO Steve Ballmer, Friedlander wrote.
Yahoo had no immediate comment on Friday. Generally, companies often seek to keep parts of publicly available lawsuits under seal for competitive reasons.
A hearing on the request to unseal the disputed material has been scheduled for Tuesday in Chandler's court, said Mark Lebovitch, another lawyer representing the shareholders. He declined further comment.
