Creditors' committees

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Creditors' committees
  • Formal creditors' committees in formal insolvencies (adminsitration, liquidation, receivership and bankruptcy)
  • Informal creditors' committees
  • Bondholders' committees
  • SIP 15 and accompanying guidance

Creditors' committees

Formal creditors' committees in formal insolvencies (adminsitration, liquidation, receivership and bankruptcy)

Formal creditors' committees are often formed in large or complex formal insolvencies and are often consulted by the relevant office holder on key issues as they provide a useful sounding board.

Generally, there will be between three and five members in a committee, usually consisting of the creditors with the largest exposure to the company and so greatest interest in the conduct of the insolvency proceedings. Each member of the committee has one vote and an odd number of committee members is usually chosen to avoid any deadlock on voting. Committee members can usually claim reimbursement for their reasonable expenses in attending creditors' meetings.

Most committees will focus on review and approval of the office holder's fees and remuneration.

If a creditor's claim is later rejected, they can no longer serve on the creditors' committee.

For further details, see Restructuring & Insolvency Practice Notes: Formal creditors’ committee meetings—the position under The Insolvency (England and Wales) Rules 2016 and Formal creditors' committees in bankruptcy—the position under the Insolvency (England and Wales) Rules 2016.

Informal creditors' committees

In many restructurings, informal (or ad hoc or unofficial) creditors' committees are often formed as opposed to formal creditors' committees and can

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