A creditor committee is a group of creditors who have been appointed to represent the interests of all creditors in a bankruptcy case. The committee is responsible for reviewing the debtor’s financial situation, participating in negotiations with the debtor and other parties, and making recommendations to the court regarding the bankruptcy proceedings. The committee’s primary goal is to ensure that creditors are treated fairly and receive the maximum possible repayment of their debts.
The members of a creditor committee are typically chosen based on the size and type of their claims against the debtor. The bankruptcy court may appoint the committee members or allow creditors to elect their representatives.
The primary role of a creditor committee is to protect the interests of all creditors involved in the bankruptcy case. They review the debtor’s financial information, participate in negotiations with the debtor, and propose or support a plan for the distribution of assets and repayment of debts.
Yes, a creditor committee has the authority to reject a proposed repayment plan if they believe it is not in the best interest of the creditors. They can also propose alternative plans or modifications to the existing plan.
Yes, a creditor committee has the power to initiate legal action against the debtor if they believe it is necessary to protect the interests of the creditors. This may include filing lawsuits to recover assets or challenging certain transactions.
Yes, a creditor committee can engage in negotiations with the debtor outside of court to reach a mutually agreeable resolution. These negotiations may involve discussions on repayment terms, asset sales, or other matters related to the bankruptcy case.
In some bankruptcy cases, the members of a creditor committee may be entitled to receive compensation for their time and expenses. The amount and method of compensation are typically determined by the bankruptcy court.
While a creditor committee represents the collective interests of all creditors, they do not typically represent individual creditors on a personal level. Individual creditors may choose to hire their own legal representation to advocate for their specific claims.
Yes, a creditor committee can have a significant influence on the outcome of a bankruptcy case. Their recommendations and proposals carry weight in negotiations and court proceedings, and their approval is often required for the approval of a repayment plan.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 12th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/creditor-committee/
- Modern Language Association (MLA):Creditor Committee. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/creditor-committee/.
- Chicago Manual of Style (CMS):Creditor Committee. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/creditor-committee/ (accessed: May 09 2024).
- American Psychological Association (APA):Creditor Committee. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/creditor-committee/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts