Section 10. Chapter 11 Bankruptcy (Reorganization)›5.17.10 Chapter 11 Bankruptcy (Reorganization)›Exception:
Chapter 11 Committees
Internal Revenue Manual Part 5. Collecting Process · 2026-10-03 edition · updated 2026-10-04 · United States
The USBC provides a mechanism that allows unsecured creditors to oversee the debtors' operations and voice their concerns throughout the Chapter 11 case. The UST appoints a committee of unsecured creditors as soon as practicable after:
A voluntary Chapter 11 petition is filed; or,
An involuntary petition is filed by creditors and an order for relief is entered in the case.
The powers of the Unsecured Creditors’ Committee in a Chapter 11 case are very significant and extensive (11 USC 1102 and 1103). The views of the Unsecured Creditors' Committee are important to the bankruptcy court.
The Unsecured Creditors’ Committee ordinarily consists of the creditors who are willing to serve on the committee and that hold the seven largest unsecured claims against the debtor (11 USC 1102(b)).
11 USC 1103 authorizes the Unsecured Creditor's Committee to employ various parties to represent or perform services for the committee. These parties may include:
One or more attorneys,
Accountants, or
Other agents.
The IRS and most governmental units are not eligible to serve as members of the Unsecured Creditors’ Committee (11 USC 101(41)).
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