Order Granting Motion to Appoint an Equity Committee

Summary

This template is an order granting a motion to appoint an equity committee and is for use by a party that files a motion to direct the U.S. Trustee to appoint an equity committee. This template includes practical guidance, drafting notes, and alternate clauses. Section 1102 of the Bankruptcy Code provides for the formation of committees of creditors and shareholders in a case under Chapter 11. Section 1102(a)(1) allows the U.S. Trustee to appoint equity committees as the U.S. Trustee "deems appropriate." Thus, the U.S. Trustee is not required to form an equity committee. Shareholders seeking the appointment of an equity committee must affirmatively request its formation. A shareholder typically sends a letter to the U.S. Trustee requesting that the U.S. Trustee solicit shareholders' interest in serving on a formal committee. The request for the appointment of an equity committee is often met with opposition by the debtor and/or other parties-in-interest. As a result, the bankruptcy court will often be forced to consider a request to appoint an equity committee. Section 1102(a)(2) provides that a court may order the appointment of, among others, a committee of equity security holders "if necessary to assure adequate representation." 11 U.S.C. § 1102(a)(2). If the U.S. Trustee denies the appointment of an equity committee, counsel will need to make a motion to direct the U.S. Trustee to form an equity committee. For a full listing of key content that on important topics when litigating disputes in bankruptcy cases, see Bankruptcy Litigation Resource Kit. For a motion template, see Motion to Appoint an Equity Committee. For more information on equity committees, see Equity Committees.