Legal Counsel For Unsecured Creditors Eligible To Form Committees
When a debtor files a chapter 11 bankruptcy petition, creditors and interest holders often view the news as a pending negative event. They may dread inevitable losses and/or recovery achievable only through expensive litigation. A more positive outlook can see possibilities for reorganization of debts and substantial recovery without a great burden of legal fees. In many cases, a successful reorganization can ensure a significant return to creditors. An unsecured creditors’ committee can play a large part in this process.
A creditors’ committee is a group of creditors appointed by the Office of the United States Trustee (U.S. Trustee), a division of the Department of Justice, to advise and assist the bankruptcy court in making decisions that affect the rights of unsecured creditors. Committees may also be formed of groups of bondholders. At the Ito Law Group, we assist our clients who are creditors of bankrupt entities and seek to form or join creditors’ committees that can help them maximize recovery.
Duties And Opportunities For Creditors Through Committee Participation
Unsecured creditors, equity holders or bondholders often have much to lose in a bankruptcy, but it is not cost-effective for them to defend their interests on their own. Committees offer such creditors an opportunity to provide meaningful input at a lower cost.
We are particularly well-suited to assist committees formed in bankruptcy cases and parties affected by bankruptcy. Our lawyers present our clients’ eligibility to serve on these committees to the U.S. Trustee. We then help committees fulfill their duties to bring evidence of fraud before the bankruptcy court and otherwise protect the interests of creditors or others whom the committees represent. With our guidance, our clients may hire accountants and other professionals to investigate the debtor at the debtor’s expense.
Our Firm Is Here To Guide Committees
In sum, bankruptcy committees present an opportunity for parties affected by a bankruptcy filing to maximize their impact in the bankruptcy case with the least amount of direct costs. We urge you to explore these options as early as possible. The Ito Law Group is available to provide this analysis and to assist in every aspect of committee representation, from helping a creditor to be appointed, to representing the committee before the U.S. Trustee.