11 U.S.C. § 1101 — Definitions for this chapter

Page 239 TITLE 11—BANKRUPTCY § 1102 SUBCHAPTER I—OFFICERS AND ADMINISTRATION § 1101. Definitions for this chapter In this chapter— (1) ‘‘debtor in possession’’ means debtor ex- cept when a person that has qualified under section 322 of this title is serving as trustee in the case; (2) ‘‘substantial consummation’’ means— (A) transfer of all or substantially all of the property proposed by the plan to be transferred; (B) assumption by the debtor or by the successor to the debtor under the plan of the business or of the management of all or sub- stantially all of the property dealt with by the plan; and (C) commencement of distribution under the plan. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2626.) HISTORICAL AND REVISION NOTES SENATE REPORT NO. 95–989 This section contains definitions of three terms that are used in chapter 11. Paragraph (1) defines debtor in possession to mean the debtor, except when a trustee who has qualified in serving in the case. Paragraph (2), derived from section 229a of current law [section 629(a) of former title 11], defines substan- tial consummation. Substantial consummation of a plan occurs when transfer of all or substantially all of the property proposed by the plan to be transferred is actually transferred; when the debtor (or its successor) has assumed the business of the debtor or the manage- ment of all or substantially all of the property dealt with by the plan; and when distribution under the plan has commenced. Paragraph (3) defines for purposes of Chapter 11 a public company to mean ‘‘a debtor who, within 12 months prior to the filing of a petition for relief under this chapter, had outstanding liabilities of $5 million or more, exclusive of liabilities for goods, services, or taxes and not less than 1,000 security holders.’’ There are, as noted, special safeguards for public investors re- lated to the reorganization of a public company, as so defined. Both requirements must be met: liabilities, excluding tax obligations and trade liabilities, must be $5 million or more; and (2) the number of holders of securities, debt or equity, or both, must be not less than 1,000. The amount and number are to be determined as of any time within 12 months prior to the filing of the petition for reorganization. § 1102. Creditors’ and equity security holders’ committees (a)(1) Except as provided in paragraph (3), as soon as practicable after the order for relief under chapter 11 of this title, the United States trustee shall appoint a committee of creditors holding unsecured claims and may appoint addi- tional committees of creditors or of equity secu- rity holders as the United States trustee deems appropriate. (2) On request of a party in interest, the court may order the appointment of additional com- mittees of creditors or of equity security holders if necessary to assure adequate representation of creditors or of equity security holders. The United States trustee shall appoint any such committee. (3) Unless the court for cause orders otherwise, a committee of creditors may not be appointed in a small business case or a case under sub- chapter V of this chapter. (4) On request of a party in interest and after notice and a hearing, the court may order the United States trustee to change the membership of a committee appointed under this subsection, if the court determines that the change is nec- essary to ensure adequate representation of creditors or equity security holders. The court may order the United States trustee to increase the number of members of a committee to in- clude a creditor that is a small business concern (as described in section 3(a)(1) of the Small Busi- ness Act), if the court determines that the cred- itor holds claims (of the kind represented by the committee) the aggregate amount of which, in comparison to the annual gross revenue of that creditor, is disproportionately large. (b)(1) A committee of creditors appointed under subsection (a) of this section shall ordi- narily consist of the persons, willing to serve, that hold the seven largest claims against the debtor of the kinds represented on such com- mittee, or of the members of a committee orga- nized by creditors before the commencement of the case under this chapter, if such committee was fairly chosen and is representative of the different kinds of claims to be represented. (2) A committee of equity security holders ap- pointed under subsection (a)(2) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest amounts of eq- uity securities of the debtor of the kinds rep- resented on such committee. (3) A committee appointed under subsection (a) shall— (A) provide access to information for credi- tors who— (i) hold claims of the kind represented by that committee; and (ii) are not appointed to the committee; (B) solicit and receive comments from the creditors described in subparagraph (A); and (C) be subject to a court order that compels any additional report or disclosure to be made to the creditors described in subparagraph (A). (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2626; Pub. L. 98–353, title III, § 499, July 10, 1984, 98 Stat. 384; Pub. L. 99–554, title II, § 221, Oct. 27, 1986, 100 Stat. 3101; Pub. L. 103–394, title II, § 217(b), Oct. 22, 1994, 108 Stat. 4127; Pub. L. 109–8, title IV, §§ 405, 432(b), Apr. 20, 2005, 119 Stat. 105, 110; Pub. L. 116–54, § 4(a)(11), Aug. 23, 2019, 133 Stat. 1086.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS Section 1102(a) of the House amendment adopts a compromise between the House bill and Senate amend- ment requiring appointment of a committee of credi- tors holding unsecured claims by the court; the alter- native of creditor committee election is rejected. Section 1102(b) of the House amendment represents a compromise between the House bill and the Senate amendment by preventing the appointment of creditors who are unwilling to serve on a creditors committee. SENATE REPORT NO. 95–989 This section provides for the election and appoint- ment of committees. Subsection (c) provides that this section does not apply in case of a public company, as to which a trustee, appointed under section 1104(a) will