The New Committee Disclosure Requirements: Much Ado About Nothing?
by: Douglas E. Wedge
Moore & Van Allen, PLLC; Charleston, S.C.
It is a matter of debate among trade creditors whether active participation on a creditors’ committee is time well spent. On the one hand, participation on a chapter 11 creditors’ committee can be expected to involve a great deal of time, add a serious amount of extra work for credit managers, in-house counsel or whomever is chosen to represent the creditor on the committee, and imposes on each member of the committee a fiduciary duty to fellow creditors. On the other hand, ours is one of the few, if not the only, bankruptcy systems where unsecured creditors are accorded a significant voice in the disposition of a reorganization, which requires the active participation of creditors willing to work on committees. Indeed, Congress expressed its recognition of the importance of committee membership in its modification of the Bankruptcy Code to allow a party in interest to object to the U.S. Trustee’s selection of committee members.
Agenda for the 2006 Annual Spring Meeting
The Unsecured Trade Creditors and Uniform Commercial Code Committees will present a panel dealing with the sea change occurring in the worldwide automotive industry. It is not news that North American auto suppliers are filing chapter 11 petitions almost every week, and many others are attempting to negotiate out-of-court restructurings with their suppliers, customers and financing banks. This new environment was primarily caused by increased foreign competition – particularly from emerging countries such as the Peoples' Republic of China. Automobiles produced by lean production techniques in Japan are of high quality, appropriately priced for the North American market and provide overall better gas mileage than vehicles manufactured by the domestic "Big Three." In addition, Japanese OEMs have established manufacturing plants in the United States staffed with a nonunion workforce, thereby avoiding the high labor and legacy costs that the Big Three presently shoulder.
Our education session addressing these topics will be conducted on Saturday, April 22, at 9:30 a.m. The panel will be composed of experts in the automotive restructuring and insolvency disciplines. Jim Gillette is the director of supplier analysis for CSM Worldwide, an automotive consulting firm with offices in the Americas, Europe and Asia. Val Venable is the credit manager of GE Plastics and is a former chairperson of the National Association of Credit Management. Hideyuki Sakai is a Tokyo bengoshi who specializes in cross-border insolvency cases and is a fellow of the American College of Bankruptcy. Patrick Mears is a partner of Barnes & Thornburg, LLP in Grand Rapids, Mich., and represents suppliers and customers in automotive chapter 11 cases.