Creditors' committees

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Formal creditors' committees

Formal creditors' committees are formed in large or complex formal insolvencies (such as administration, liquidation, bankruptcy and receivership) and are consulted by the relevant office-holder regarding strategy and in particular how funds may be used for specific investigations.

The committee is used as a sounding board and cannot interfere with the office-holder’s statutory duties or cause the office-holder to do anything that they consider to be inappropriate.

Generally, there will be at least three and not more than five members of a committee, usually consisting of creditors with the largest exposure to the company and so greatest interest in the conduct of the insolvency proceedings.

A creditor is eligible to be a member of such a committee if they have proved for a debt and the debt is not wholly secured. Each member of the committee has one vote and an odd number of committee members is usually chosen to avoid any deadlock on voting.

A person’s membership of a committee is automatically terminated in a number of circumstances, including where the person ceases to be a creditor

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Latest Restructuring & Insolvency News

Restructuring & Insolvency weekly highlights—13 November 2025

This week's edition of Restructuring & Insolvency weekly highlights includes: an analysis of the successful use of cross-class cramdown against nine dissenting classes (Re Poundland Ltd), a discussion of the court’s confirmation of the primacy of English jurisdiction over the governance of English companies while recognising limits on its extraterritorial reach (CIHL v Protopapas), plus a round-up of other news and cases for restructuring and insolvency professionals.

Provisional liquidator’s appointment may trigger disapplication of TUPE transfer and automatic unfair dismissal provisions (Secretary of State for Business and Trade v Sahonta)

Employment analysis: The EAT has confirmed that the appointment of a provisional liquidator may trigger regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), SI 2006/246, meaning that regulations 4 and 7 governing the transfer of employment and employees and automatic unfair dismissal are disapplied.

Winding-up petition dismissed due to genuine and substantial dispute (Abcor Finance Securities Ltd v Binomia Ltd)

Restructuring & Insolvency analysis: The High Court dismissed a winding-up petition on the basis that the petition debt was subject to a genuine and substantial dispute. The case serves as a warning to creditors that insolvency proceedings are not an appropriate forum for resolving contractual disputes. The facts underlying the decision also highlight the critical role of precise drafting in loan agreements, particularly as to repayment terms. Written by Helen Martin, managing associate at Stevens & Bolton LLP.

Clash of jurisdictions—The English court confirms its jurisdiction against long-arm receiverships, but provides narrow carve-out for third parties (CIHL v Protopapas & Others)

Restructuring & Insolvency analysis: The High Court reaffirmed the primacy of English jurisdiction over the governance of English companies while recognising limits on its extraterritorial reach. Mann J declined to restrain De Beers from settling US proceedings initiated by a South Carolina ‘long-arm’ receiver, holding that English courts will not compel defendants to contest foreign litigation they wish to resolve commercially. The decision preserves the English court’s declarations that the receiver lacked authority while clarifying that third parties may settle such proceedings without risking contempt. The judgment underscores a pragmatic balance between protecting English corporate sovereignty and respecting international comity in cross-border disputes. Written by George Bazinas and Josh Wong of Signature Litigation LLP, the instructed solicitors of Cape Intermediate Holdings Limited and Cape Plc.

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