The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:
In many restructurings, the early creation of a creditors' committee (or steering committee) will greatly assist negotiations between the debtor company and its creditors, often resulting in a speedier resolution and better returns to creditors as a whole.
The committee may be formal or informal/ad hoc (see Practice Note: Informal creditors' committee in a restructuring) and is usually formed of creditors within the same class. The committee will last until either a successful restructuring is agreed and implemented, or until the collapse of restructuring negotiations.
There are no statutory rules or best practice guidelines on the creation of committees in a consensual restructuring (unlike formal insolvencies where Statements of Insolvency Practice (SIPs) 15 and 6 apply—see Practice Note: Statements of Insolvency Practice (SIPs)—a quick guide, SIP 15, which provides guidance to insolvency practitioners on reporting and providing information to committees and applies to insolvency appointments starting on or after 1 March 2017, and also this guide which R3 has produced to help creditors understand the role of a committee and their responsibilities if they agree to become members of a committee).
When forming a committee, it is useful to consider the following issues:
rationale for having a committee
role of the committee
composition (ie membership) and types of committee
conflicts of interest
governance and mechanics for day-to-day operations
confidentiality and information sharing
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.