The principal organ of the insolvency creditors is the creditors’ assembly, through which the creditors jointly exercise their rights vis-à-vis the insolvency debtor, the insolvency court and the insolvency administrator. Another vital organ ensuring creditors’ autonomy is the creditors’ committee (Gläubigerausschuss), a representative body regularly elected by the creditors’ assembly. As a creditors’ committee can act much faster and more flexibly than the creditors’ assembly, its appointment makes particularly sense in debtor-in-possession proceedings and in case the debtor’s business is being continued.
At the same time, members of the creditors’ committee get additional and more detailed information in comparison to other creditors. The respective creditors gain a better understanding of the proceeding and, furthermore, often have the opportunity to influence the specific process of the proceeding. On the other hand, a membership results in a high liability risk. Also, as members of the committee are obliged to fulfill their duty independently and free from any particular interests, the risk of a conflict of interests is inherent to the office.
The following article describes the chances, benefits and risks as well as the rights and obligations involved in a membership of the creditors’ committee.