How does a creditor’s committee work in a Chapter 11 bankruptcy?

In Mississippi, a creditor’s committee is a small group of creditors who are appointed by the court during a Chapter 11 bankruptcy case to represent the interests of all of the creditors. The purpose of the creditor’s committee is to help the debtor and creditors in the reorganization or restructuring of the debtor’s business. The committee typically consists of three to five members who are appointed by the U.S. Bankruptcy Court. The number of members is determined by a range set by the Bankruptcy Rules. The committee is responsible for finding out how a debtor’s assets and liabilities are structured. It then makes recommendations to the court and to the debtor as to how the debtor’s finances should be managed. The committee is also responsible for negotiating with the debtor and other creditors on behalf of all of the creditors. The committee also provides advice and guidance to creditors on how to protect their interests during the bankruptcy case, as well as discussing the distribution of any money from the debtor’s estate. Finally, the committee serves as the voice of the creditors in the court system, and is responsible for representing the creditors’ interests in the bankruptcy case.

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How does a creditor’s committee work in a Chapter 11 bankruptcy?

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