Parties to an insolvency proceeding are regularly the insolvency debtor, the insolvency court, the insolvency administrator (or the trustee with the management) as well as the insolvency creditors and creditors with a right to separate satisfaction (absonderungsberechtigte Gläubiger). The principal organ of the insolvency creditors is the creditors' assembly, through which the creditors jointly exercise their rights vis-à-vis the insolvency debtor, the insolvency court and the insolvency administrator (Sec. 74 German Insolvency Code (Insolvenzordnung, InsO)). Another vital organ ensuring creditors' autonomy is the creditors' committee (Gläubigerausschuss), a representative body regularly elected by the creditors' assembly. The creditors' committee's role is comparable with the monitoring bodies of supervisory or advisory board under corporate law and primarily includes supervising and supporting duties vis-à-vis the insolvency administrator. The main provisions regarding the rights and duties of the creditors' committee are provided for in Sec. 67 - 73 InsO.
By appointing a creditors' committee, the insolvency creditors can strengthen their influence on the process of the insolvency proceedings. In the majority of insolvency proceedings the creditors are only informed about the current status of the proceeding and decide on specific measures of the insolvency administrator in the initial report meeting, the claims verification meeting and the final meeting of the creditors' assembly. In contrast, the creditors' committee ensures that the groups of creditors represented become better and regularly informed about the process of the insolvency proceedings and acts of the insolvency administrator. Furthermore, it grants them the limited possibility to take influence on certain decisions.
Appointment of the creditors' committee
Unlike the creditors' community, which comes into existence automatically upon insolvency proceedings being opened and in which every creditor is represented and which only needs to be invited to an assembly, the creditors' committee must be appointed separately. In this regard, the German Insolvency Code distinguishes between:
the provisional committee as a compulsory committee according to Sec. 22a para. 1 InsO if certain codified key figures regarding the debtor's balance sheet total, the turnover and number of employees are met, the optional provisional committee according to Sec. 22a para. 2 InsO, which...