In most Chapter 11 cases, official committees serve an important and critical role and their appointment and tenure is uncontested. At times, however, a debtor or other party-in-interest may question the need for a committee, the efficacy of a particular committee, or the appropriateness of appointing multiple committees, leading in the latter case in particular to concerns about the costs and potential burdens that may arise from being required to cooperate and negotiate with more than one committee. Such circumstances may lead a debtor or other party-in-interest to ask the bankruptcy court to disband or vacate a committee appointment.

Section 1102(a)(1) of the Bankruptcy Code provides, in pertinent part, that “as soon as practicable after the order for relief under Chapter 11 of this title, the United States trustee shall appoint a committee of creditors holding unsecured claims and may appoint additional committees of creditors or of equity security holders as the United States trustee deems appropriate.”1 Thus, at least in Chapter 11 cases, the U.S. Trustee (UST) must appoint a committee of unsecured creditors and may appoint additional committees in his or her discretion. However, the Bankruptcy Code is silent regarding whether a court has the authority to disband or vacate a committee appointed by the UST if the situation so warrants.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]