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2021 Stroock Bankruptcy Guide

Issue link: https://mbozikis.ufcontent.com/i/1422521

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243 The court is not given authority to review the amount of debt the municipality incurs in the ordinary course of its operations. See id. Likewise, the court does not oversee the debtor's retention of professionals or payment of their fees except in the context of plan confirmation. See id. Further, the debtor may, but is not required to, pay some or all of its prepetition obligations during the course of the bankruptcy—even prior to confirming a plan. G. Creditors in a Municipal Bankruptcy 1. Role of Creditors The role of creditors is more limited in a Chapter 9 proceeding than in cases under the other Chapters. Creditors cannot file a plan of debt adjustment and there is no meeting of creditors. There is, however, a creditors' committee which functions like a Chapter 11 creditors' committee. Its duties include consulting with the debtor concerning the administration of the case, investigating the acts, conduct, assets, liabilities and financial condition of the debtor and participating in plan formulation. The committee can employ professionals to represent it. The statute, however, does not expressly require the debtor to pay the fees and expenses of professionals retained by the Committee. 2. Claims A municipal debtor is required to file a list of creditors under Section 924. Typically, the list will be filed with the petition, but the court can fix a different time if the debtor is unable to file the list at the time of the bankruptcy filing. The court fixes a bar date for the filing of claims. A creditor need not file a proof of claim if it agrees with the way its claim is scheduled on the list of creditors, unless the claim is scheduled as contingent, disputed or unliquidated, in which case a proof of claim must be filed. 11 U.S.C. § 925.

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