Creditors’ Committee (UCC)

Category: legal

A group representing the general unsecured creditors in a Chapter 11 bankruptcy case, appointed by the U.S. Trustee.

The UCC is the "watchdog." Unsecured creditors are usually at the back of the line and highly vulnerable. The committee represents their collective interests, investigating the debtor’s conduct, participating in plan negotiations, and ensuring the estate’s assets aren’t squandered.

Common Examples

• The unsecured creditors’ committee hired its own forensic accountants to audit the debtor’s pre-bankruptcy financial transfers.
• Because their legal and professional fees are paid by the bankruptcy estate, the UCC has significant power to shape the final reorganization plan.