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

In Washington, a creditor’s committee is a group of creditors that works with a debtor in a Chapter 11 bankruptcy case. This committee is generally comprised of the creditors who are owed the most money, and their purpose is to represent the interests of all creditors in the bankruptcy case. The committee works with the debtor to determine the best course of action for paying off debts within the given timeframe. The committee has the power to investigate the debtor’s actions and financial condition, as well as to submit a plan of reorganization for how the debtor can repay its creditors. In addition, the committee may also be responsible for finding a buyer for the debtor’s assets. The committee can also object to any proposed plan or sale of the debtor’s assets, and they can also negotiate on behalf of the creditors over the payment of any claims that the creditors may have. The creditor’s committee will also work with the court, debtor, and creditors to make sure that any plan of reorganization is fair to all parties involved. Thus, they play a vital role in ensuring that the debtor can successfully reorganize and emerge from bankruptcy.

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

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