Ad Hoc Committee Disclosure Requirements

Collective stakeholder participation in a Chapter 11 case, however, extends beyond membership on committees officially sanctioned by the Bankruptcy Code. Unofficial, or 'ad hoc' committees, have also long played prominent roles in bankruptcy cases. Like official committees of unsecured creditors, shareholders, retirees or other creditor groups, ad hoc committees commonly retain professionals and participate in a Chapter 11 case by filing pleadings, appearing before the bankruptcy court and otherwise seeking to influence the outcome of the reorganization and the ultimate recovery on their claims or interests. By acting collectively, committee members share the costs of participating in a Chapter 11 case and have the ability to wield greater influence than they would if acting alone. The Bankruptcy Code itself acknowledges that unofficial committees can play an important role in a Chapter 11 case by providing in ” 503(b)(3)(D) and (4) that costs, including professional fees, incurred by such committees in making a 'substantial contribution' to the case will be paid by the estate as priority administrative expenses.