Yahoo Inc. is seeking to conceal large portions of a shareholder lawsuit alleging the Internet company's board improperly thwarted Microsoft Corp.'s $47.5 billion takeover offer, raising shareholder questions over the motives for the secrecy.

In a letter sent 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 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 sanitize 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 III.

The redacted documents include information about an employee severance plan that Yahoo adopted shortly after Microsoft made its initial bid Jan. 31 and notes about a conversation between Yang and Microsoft CEO Steve Ballmer, Friedlander wrote.

Yahoo had no immediate comment 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 at 10 a.m. Tuesday in Chandler's court, said Mark Lebovitch, another lawyer representing the shareholders. He declined further comment.

The concealed information was gathered during the discovery phase of the nearly three-month-old suit. If they're made public, the documents could become fodder in Icahn's campaign to remove Yahoo's board. Continued...