Video: What are creditors' committees?
In a Chapter 11 reorganization case, the creditors are permitted to organize into something called a creditors' committee. Generally speaking, the Office of the United States Trustee will send a notice to the seven largest unsecured creditors, advising them that there has been a Chapter 11 filing and inviting them to attend a creditors' committee meeting. If the US Trustee receives at least three of these creditors accepting, a creditor's committee will be formed. The creditors' committee has the right to be heard at every hearing in a Chapter 11. The creditors' committee is allowed to file motions in a Chapter 11, and the purpose of the creditors' committee is to give the entire general unsecured creditor body a voice in a Chapter 11. The creditors' committee is also entitled to hire professionals, such as attorneys and accountants. These professionals ultimately are paid by the debtor who files the Chapter 11.