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

A creditor’s committee is a group of creditors that is appointed by the U.S. Trustee in a Chapter 11 bankruptcy case in Utah. The committee is made up of unsecured creditors who have the largest claims among all of the unsecured creditors in the case. This means that all creditors that are not fully secured by assets, such as property, have the ability to participate in the committee. The purpose of the committee is to represent the interests of all unsecured creditors as a group. The committee works together to develop a plan for the repayment of the creditors’ debts to the debtor. The committee may also negotiate with the debtor on behalf of the creditors. The committee will receive any proposals from the debtor and work to ensure that all creditors are treated fairly and equitably. The committee will also investigate the debtor’s assets and liabilities, including any potential fraudulent activities, and report their findings to the court. They may also negotiate with the debtor to reduce the amount of the debt that is owed. The committee can be a powerful tool for unsecured creditors in a Chapter 11 bankruptcy case. The creditors can work together with the committee to ensure that their interests are being protected and that the debtor is following the terms of the bankruptcy plan. The committee also helps to provide an objective viewpoint that can help the court make a more informed decision.

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

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