Informal bondholders’ committee
Produced in partnership with South Square and BDO LLP
Informal bondholders’ committee

The following Restructuring & Insolvency practice note Produced in partnership with South Square and BDO LLP provides comprehensive and up to date legal information covering:

  • Informal bondholders’ committee
  • Who and what are bondholders
  • Formation
  • Role
  • Issues surrounding bondholders’ position
  • SIP 15 and accompanying guidance

Who and what are bondholders

Bondholders (sometimes also known as noteholders) have generally invested in a company’s most junior—and hence risky—debt. In a distressed situation, they will often become a pressure group, which will come together to try to extract some value from a restructuring by presenting a unified view to the debtor’s advisers and other stakeholders, including the senior lenders (see Practice Note: Bonds and notes for further details).

Bondholders will frequently be part of a complex capital structure.

Formation

The bondholders’ committee will generally be organised by either the indenture trustee for the bonds or a lawyer specialising in representing the interests of junior creditors.

The committee can also be known as:

  1. steering committee

  2. coordinating committee

  3. cocom

A committee is formed as part of a restructuring process rather than a formal i

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