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

A creditors’ committee is formed in a Chapter 11 bankruptcy when the debtor requests to restructure their debts. This committee is made up of a few creditors that the U.S. Trustee appoints. The creditors’ committee handles matters such as claims, reorganization, and formulating a plan to help the debtor reorganize their debts. The creditors’ committee is responsible for evaluating the debtor’s reorganization plan, if one is proposed, and deciding whether it should be approved or rejected. They must also review the debtor’s proposed modifications to their debt restructuring plan and make recommendations about which modifications should be made. The creditors’ committee also negotiates with the debtor to reach agreements that are beneficial to the creditors. Finally, the creditors’ committee has a fiduciary duty to monitor the operation of the debtor’s business during the bankruptcy. This may include supervising the debtor’s expenditure and investment activities, and evaluating the debtor’s financial statements. They are also responsible for filing regular reports to the court that outline their activities and any progress made in the bankruptcy case. In South Dakota, the creditors’ committee in a Chapter 11 bankruptcy plays a significant role in ensuring that the bankruptcy process is fair and beneficial to all parties involved. This committee helps ensure that creditors are being offered a fair reorganization plan and that the debtor is making efforts to pay back the creditors as originally agreed.

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

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