11 U.S. Code § 1103. Powers and duties of committees
This section defines the powers and duties of a committee elected or appointed under section 1102.
Under subsection (a) the committee may, if authorized by the court, employ one or more attorneys, accountants, or other agents to represent or perform services for the committee. Normally one attorney should suffice; more than one may be authorized for good cause. The same considerations apply to the services of others, if the need for any at all is demonstrated.
Under subsections (c) and (d) the committee, like any party in interest, may confer with the trustee or debtor regarding the administration of the estate; may advise the court on the need for a trustee under section 1104(b). The committee may investigate matters specified in paragraph (2) of subsection (c), but only if authorized by the court and if no trustee or examiner is appointed.
Subsection (a) of this section authorizes a committee appointed under section 1102 to select and authorize the employment of counsel, accountants, or other agents, to represent or perform services for the committee. The committee’s selection and authorization is subject to the court’s approval, and may only be done at a meeting of the committee at which a majority of its members are present. The subsection provides for the employment of more than one attorney. However, this will be the exception, and not the rule; cause must be shown to depart from the normal standard.
Subsection (b) requires a committee’s counsel to cease representation of any other entity in connection with the case after he begins to represent the committee. This will prevent the potential of severe conflicts of interest.
Subsection (c) lists a committee’s functions in a chapter 11 case. The committee may consult with the trustee or debtor in possession concerning the administration of the case, may investigate the acts, conduct, assets, liabilities and financial condition of the debtor, the operation of the debtor’s business, and the desirability of the continuance of the business, and any other matter relevant to the case or to the formulation of a plan. The committee may participate in the formulation of a plan, advise those it represents of the committee’s recommendation with respect to any plan formulated, and collect and file acceptances. These will be its most important functions. The committee may also determine the need for the appointment of a trustee, if one has not previously been appointed, and perform such other services as are in the interest of those represented.
Subsection (d) requires the trustee and each committee to meet as soon as practicable after their appointments to transact such business as may be necessary and proper.
1984—Subsec. (b). Pub. L. 98–353, §§ 324, 500(a), substituted “An attorney or accountant” for “A person”, substituted “entity having an adverse interest” for “entity”, and inserted provision that representation of one or more creditors of the same class as represented by the committee shall not per se constitute the representation of an adverse interest.
Subsec. (c)(3). Pub. L. 98–353, § 500(b)(1), substituted “determinations” for “recommendations”, and “acceptances or rejections” for “acceptances”.
Subsec. (c)(4). Pub. L. 98–353, § 500(b)(2), struck out “if a trustee or examiner, as the case may be, has not previously been appointed under this chapter in the case” after “section 1104 of this title”.