What is a creditor’s committee in a Chapter 11 bankruptcy?

A creditor’s committee in a Chapter 11 bankruptcy is a special committee of approved creditors. This committee is formed soon after the bankruptcy is filed and is tasked with representing all creditors of the debtor. The committee is approved by the US Trustee and is typically comprised of the seven largest unsecured creditors. The role of the committee is to act on behalf of all creditors to protect their interests throughout the bankruptcy process. In Chapter 11 bankruptcy, the creditors’ committee is empowered and authorized to investigate the debtor, review financial infromation, attend hearings and review plans proposed by the debtor. The committee is also tasked with negotiating with the debtor to ensure that all creditors receive the best possible outcome. They must represent all creditors, including unsecured creditors, and all creditors must be treated fairly and equitably. The creditor’s committee is also important for determining the value of assets and reviewing the reorganization plan proposed by the debtor. They must negotiate with the debtor to determine how much each creditor will receive in a bankruptcy settlement. Ultimately, their job is to advocate for the interests of all creditors to ensure they receive fair and equitable treatment throughout the bankruptcy process.

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What is a creditor’s committee in a Chapter 11 bankruptcy?

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