Formation
The creditors’ meeting decides whether to form it and elects its members.
Function
It obtains information, supervises the practitioner and may call a meeting.
Voting
Each member has one non-transferable vote.
Committee and meeting are different bodies
The meeting brings together bankruptcy creditors and public authorities and decides matters reserved to it by law. The committee is a smaller continuing supervisory body. It cannot replace the meeting and acts only within Federal Law No. 127-FZ and powers delegated by the meeting.
The procedure of a creditors’ meeting remains separate. A committee is most useful in a case with many participants or where continuing supervision is needed between meetings.
Composition and election
| Issue | Rule | Practical effect |
|---|---|---|
| Size | 3 to 11 members | The meeting fixes the number |
| Candidates | Individuals nominated by creditors and public authorities | A member is a named natural person |
| Term | For supervision, rehabilitation, external administration and liquidation proceedings | The meeting may re-elect the body |
| Election | Cumulative voting | A creditor distributes votes among candidates |
| Decisions | Majority of all committee members | Absences affect the ability to reach the required majority |
Committee powers
- request financial and procedural information from the practitioner or debtor’s management;
- challenge practitioner acts or omissions before the commercial court;
- decide to call a creditors’ meeting;
- recommend that the meeting seek removal of the practitioner;
- exercise other powers expressly delegated by the meeting.
Meaningful supervision requires comparison of reports, the claims register, transactions, inventory and expenses. A debtor financial analysis, for example, informs the next procedure but is not immune from documented challenge.
Sessions and records
The committee adopts its own rules. They should address calling a session, notice, documents, participation, minutes and record retention. The committee may elect a representative, with the decision recorded in minutes.
Minutes should identify the date, attendees, agenda, votes and decisions. The person conducting the session must provide access to statutory case participants.
Protecting affected rights
A challenge to a committee decision, a complaint against the practitioner and a challenge to a creditors’ meeting resolution are distinct remedies. Grounds, parties, evidence and time limits differ. Judicial review of a meeting resolution is addressed in the separate guide to challenging a creditors’ meeting resolution.
Creditor checklist
- Confirm the claim amount and register status.
- Obtain the meeting notice and committee materials.
- Review the proposed size and candidates.
- Allocate votes under cumulative voting.
- Record delegated powers precisely.
- Request minutes, reports and supporting records.
- Choose the correct remedy and deadline if rights are affected.
Questions
Is a committee always mandatory?
No. Where there are fewer than fifty bankruptcy creditors and public authorities, the meeting may decline to form one.
Can a company be a committee member?
The committee is elected from individuals nominated by creditors and public authorities.
Can a member transfer the vote by proxy?
No. A committee member’s voting right is non-transferable.
Can the committee remove the practitioner?
It may recommend that the meeting seek removal; the statutory and court procedure then applies.
Official sources
- Article 17 of Federal Law No. 127-FZ;
- Article 18 of Federal Law No. 127-FZ;
- Federal Law No. 127-FZ, current edition.
Preparing for committee work?
We can review powers, documents, voting and remedies without promising a predetermined outcome.
Initial consultation