At the end of my October blog post, Dear Debtor, You Said I was Your First Priority, a VIP!, I suggested that you might want to join a “support group” called the “Official Committee of Unsecured Creditors” (fondly referred to as the OCC or GUCCs), if you felt angry or depressed about your unsecured claim status.  Admittedly, I may have led you astray.

The OCC is not really a “support group,” at least in the conventional sense of the word. So, if it is not a support group, what is it?

Going back to my October post – you have come to the realization that you were not really a VIP to the Debtor and are not entitled to priority payment. Shortly after you admit you are a general unsecured creditor, you receive a letter from the U.S. Trustee’s Office telling you that they are forming an OCC in the Debtor’s Chapter 11 bankruptcy case and asking you if you would like to serve on the committee.

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Your first reaction is to say – Yes, pick me!  Of course I want to “be all I can be”.

Not so fast! Aren’t there some questions you want answered first like…what is the OCC?…what can the OCC do?…what are members of the OCC required to do?…and what are the dangers and benefits of being an OCC member?

Here are the answers to those questions…

The OCC is a committee appointed by the U.S. Trustee’s Office from unsecured creditors that hold the 20 largest claims against the Debtor. It represents the interest of all unsecured creditors of the debtor before the bankruptcy court and in negotiations with the debtor and other parties. Generally, there are 3 to 7 members, depending on the size of the case.

The OCC members are fiduciaries to the other unsecured creditors and are expected to act in the best interest of all unsecured creditors. As a member of the OCC you cannot favor your interest over those of other unsecured creditors.

Among other things, the OCC has the power to do the following:

  • consult with the chapter 11 debtor on administration of the case.
  • investigate the debtor’s conduct and operation of the business.
  • participate in formulating a plan.
  • may, with the court’s approval, hire an attorney, accountant or other professionals to assist in the performance of the committee’s duties. These professionals are compensated by the debtor.
  • monitor management of the debtor’s business.

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The Pros:

  • having a seat at the table and an opportunity to have a voice in the bankruptcy process.
  • legal representation of the committee, paid for by the debtor, that you would ordinarily not receive on your own.
  • access to information regarding the bankruptcy process and the debtor’s financial information, some of which is not readily available to individual creditors.
  • power to participate in and affect the debtor’s plan negotiations and negotiations with other creditors.

Possible Cons:

  • Serving as a committee member can be require a significant (uncompensated) time commitment. Are you sure you have the free time to commit?
  • Is the case out of town? You may need to travel there once in a while.
  • Since your duty is to act in the best interests of all unsecured creditors, you might have to endorse actions that would be detrimental to you and your claim.  Are you prepared to do that?

So – now that you are in the know about the OCC are you ready to “be all you can be” in your debtor’s bankruptcy case?

Before you say “yes,” serving on a creditors’ committee is an important decision. You should carefully weigh pros and cons of serving based on the facts surrounding your claim and your relationship with the debtor. Seek out a trusted bankruptcy attorney in your neck of the woods for advice.


  Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP. Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation. You can contact Heather at 561-804-4419 or hries@foxrothschild.com.