A Florida business going through Chapter 11 bankruptcy has the opportunity to reorganize company operations in order to improve its chances of surviving tough economic times. However, creditors have an interest in the activities of a business owner during the reorganization process. Creditors who may be paid less than what is owed are able to participate in a ballot process to vote on a reorganization plan. A creditors' committee is typically composed of the seven creditors with the largest unsecured claims pending against the company filing for Chapter 11. The bankruptcy trustee appoints the committee.
The responsibilities of the creditors' committee relate to oversight of business operations and administration of the business bankruptcy. The committee may consult with the debtor about the case's administration. Additionally, the committee may evaluate conduct issues and business operations to ensure that the debtor in possession is acting responsibly. The committee also helps during the development of the repayment plan for the debtor. If necessary, a creditors' committee might hire a lawyer to assist with these responsibilities. The goal in positioning this group is to promote appropriate actions on the part of the debtor.