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Written by Administrator
Thursday, 30 April 2009 19:07
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Creditor’s Committees
Creditors’ committees can play a major role in chapter 11 cases. The United States trustee, a federal employee to be distinguished from a private case trustee or panel trustee, appoints the committee, which ordinarily consists of the persons willing to serve on the committee who hold the seven largest unsecured claims against the debtor. Unsecured claims are those for which the extension of credit was based upon an evaluation by the creditor of the debtor’s ability to pay, as opposed to retain a lien against the property of the debtor to secure payment. In addition, other types of unsecured claims may arise from patent infringement, personal injury or other damage claims. The committee may consult with the debtor in possession on the administration of the case, investigate the conduct of the debtor and the operation of the business, and participate in the formulation of a plan. A creditors’ committee can be an important safeguard to the management of the business by the debtor in possession.
Last Updated ( Monday, 18 May 2009 06:54 )
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Creditor's Committees
