Introduction

• Jurisdiction: United States

Introduction

This book is a collective effort of past and present leadership and members of ABI's Unsecured Trade Creditors Committee. Its purpose is to provide a handy resource for counsel and other professionals that frequently represent, or are considering representing, an official committee of unsecured creditors (the "committee").

The committee serves an important function in the chapter 11 process by giving a voice to the holders of general unsecured claims as to whether a debtor will be reorganized, sold as a going concern or liquidated. The committee serves the interests of all holders of general unsecured claims, from the "mom and pop" creditor with a $100 claim to the institutional creditor holding a $50 million claim, and from the supplier, to the landlord, to the bondholder, to the former CEO.

The committee has been described as the "watchdog" for holders of general unsecured claims: Its objective is to take such actions that will maximize the value of the debtor's assets and in turn generate the highest and best recovery for its constituency. Professionals representing committees face myriad challenges, so the objective of this book is to identify these challenges and provide some guidance on how best to meet these challenges.

In Chapter I, we provide a general overview of the role of the committee. This chapter touches upon the various duties and responsibilities of the committee, many of which are explained in greater detail in subsequent chapters of the book.

In Chapter II, we walk through the nuts and bolts of committee formation and the initial activities of a typical committee, including selecting a chairperson, adopting bylaws and retaining professionals to assist the committee in discharging its duties.

In Chapter III, we dive into the committee's investigative function and discuss the areas that a committee will be expected to investigate and describe the various tools available to a committee to fulfill this important committee function.

In Chapter IV, we explain the committee's role in the negotiation over the use of cash collateral and obtaining debtor-in-possession financing. This...