The Rising Use of Special Committees in Chapter 11 Investigations

Summary

This article discusses the use of special committees in Chapter 11 cases. Special committees are showing up more often in large Chapter 11 cases, and for good reason. When a company enters bankruptcy with questions about insider transactions, board decisions, or other potential wrongdoing, it becomes difficult for the same insiders to investigate or decide how to handle those issues. To manage that conflict, many companies are turning to special committees made up of independent directors.