IVA Glossary
C
Creditors Committee
Whenever a company faces unpaid debt issues, and if it went through debt management solutions unsuccessfully, an administrative receiver is being appointed to deal with the financial matters, especially if the company faces bankruptcy.
Now, creditors usually want to recuperate as much of their losses as possible. This is why, a creditors' committee is being established in order to supervise the administrative receiver, and to make sure that they will indeed recuperate a given percentage at least, of their owed amounts.
Usually, when a company is bankrupt, the assets are being sold and the creditors paid back (fully or partially, depending). A creditors' committee continuously keeps in touch with the administrator through the whole process of the bankruptcy.
This committee is usually made up of members appointed by the creditors themselves, and the committee must have no more than five active members, but no less than three. Within a few months after the order has been issued, the administrator himself has to hold a meeting with the committee of creditors and discuss all the important aspects of the following process (the remuneration of the administrator is perhaps the most important). From there on, all throughout the process there will be held several "administrator - committee" meetings, in order to make sure everything is going as planned.
Now, creditors usually want to recuperate as much of their losses as possible. This is why, a creditors' committee is being established in order to supervise the administrative receiver, and to make sure that they will indeed recuperate a given percentage at least, of their owed amounts.
Usually, when a company is bankrupt, the assets are being sold and the creditors paid back (fully or partially, depending). A creditors' committee continuously keeps in touch with the administrator through the whole process of the bankruptcy.
This committee is usually made up of members appointed by the creditors themselves, and the committee must have no more than five active members, but no less than three. Within a few months after the order has been issued, the administrator himself has to hold a meeting with the committee of creditors and discuss all the important aspects of the following process (the remuneration of the administrator is perhaps the most important). From there on, all throughout the process there will be held several "administrator - committee" meetings, in order to make sure everything is going as planned.
