In chapter 11 bankruptcy proceedings, corporations or partnerships retain control over their businesses by submitting a reorganization plan and presenting it before U.S. bankruptcy courts. Chapter 11 cases may also involve the formation of a creditors’ committee, which often plays an integral role in the direction of a particular case.
At its most basic level, a creditors’ committee reviews the progress of a case and ensures that the debtor files financial reports at appropriate intervals. The committee typically includes individuals who represent a company’s creditors. Creditors’ committees also investigate the debtor’s financial condition, as well as the desirability of continuance of the business and the operations of the business as a whole. Some creditors’ committees may help formulate business plans, while others may ask the court to appoint a professional examiner to report on operations. In certain cases, creditors’ committees may request a dismissal of the case or conversion to a chapter 7 liquidation.
At its most basic level, a creditors’ committee reviews the progress of a case and ensures that the debtor files financial reports at appropriate intervals. The committee typically includes individuals who represent a company’s creditors. Creditors’ committees also investigate the debtor’s financial condition, as well as the desirability of continuance of the business and the operations of the business as a whole. Some creditors’ committees may help formulate business plans, while others may ask the court to appoint a professional examiner to report on operations. In certain cases, creditors’ committees may request a dismissal of the case or conversion to a chapter 7 liquidation.