This feature originally appeared in the February 23rd edition of the Pittsburgh Business Times.
Q: What does it mean to be named a “top 20” unsecured creditor in a bankruptcy filing? Is there anything my company needs to do?
Advice: A debtor filing for Chapter 11 must file a list of its 20 largest unsecured creditors. Those creditors are then given an opportunity to form an Unsecured Creditors’ Committee. The Committee provides an organized, centralized process whereby unsecured creditors can be assured that their claims and interests are being protected throughout the bankruptcy process. The Committee often plays a significant role in how the case progresses and the ultimate distribution to creditors.
Participating in an Unsecured Creditors’ Committee requires minimal time commitment and no out-of-pocket costs to its members. The Committee has certain well-defined rights under the Bankruptcy Code, and it also has the right to retain professionals to help provide those functions. The fees of all professionals retained by the Committee are paid by the bankrupt debtor’s estate, not by Committee members.
Bernstein-Burkley often represents Unsecured Creditors’ Committees, and we’d be happy to help guide your company through your customer’s Chapter 11 process. To learn more, visit bernsteinlaw.com/unsecuredcreditor.