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2021 Stroock Bankruptcy Guide

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149 Carter v. Rogers, 220 F.3d 1249, 1252 (11th Cir. 2000); In re Stone, No. 92-01383, 1998 Bankr. LEXIS 1976 (Bankr. D. D.C. Nov. 4, 1998). D. Creditors' Committee Shortly after entry of the order for relief under Chapter 11, the U.S. Trustee shall appoint a committee of unsecured creditors. 11 U.S.C. § 1102(a)(1). The only exception to this mandate is in a small business case or a case under Subchapter V, where the court may order that a committee of unsecured creditors not be appointed. 11 U.S.C. § 1102(a)(3). 80 The U.S. Trustee also has the discretion to appoint additional committees of creditors or equity security holders as it deems appropriate. 11 U.S.C. § 1102(a)(1). In addition, on request of a party in interest, the court may order the appointment of additional committees of creditors or equity security holders to ensure adequate representation. 11 U.S.C. § 1102(a)(2). Once a committee has been appointed, the trustee or debtor-in- possession is required to meet with such committee to transact such business as may be necessary and proper. 11 U.S.C. § 1103(d). Committees appointed by the U.S. Trustee represent the class of creditors or equity holders from which they are selected and act as the primary negotiating bodies for the formulation of a plan. See In re SPM Mfg. Corp., 984 F.2d 1305, 1316 (1st Cir. 1993) ("The committee as the sum of its members is not intended to be merely an arbiter but a partisan which will aid, assist, and monitor the debtor pursuant to its own self-interest.") (internal citation omitted). A committee of unsecured creditors typically consists of the persons willing to serve that hold the seven largest unsecured claims against the debtor. In certain cases, a creditors' committee 80 A small business debtor is defined as "a person engaged in commercial or business activities . . . that has aggregate non-contingent liquidated secured and unsecured debts . . . in an amount not more than $2,725,625 . . . ." 11 U.S.C. § 101(51D).

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