Official Committee Members: Fiduciary Duty Liability

Members of official creditors' committees in Chapter 11 cases owe a fiduciary duty to the entire body of unsecured creditors. <i>See Woods v. City National Bank</i>, 312 U.S. 262, 268-69 (1941). As fiduciaries, committee members should have undivided loyalty to those they serve, free of any conflict of interest. <i>Id</i>. The imposition of such a broad duty to unsecured creditors generally might be otherwise unremarkable, except that committee members themselves obviously have significant selfish interests in the outcome of the bankruptcy case.

27 minute readFebruary 09, 2004 at 09:12 AM
By
William R. Baldiga
John C. Elstad
Official Committee Members: Fiduciary Duty Liability

Members of official creditors' committees in Chapter 11 cases owe a fiduciary duty to the entire body of unsecured creditors.See Woods v. City National Bank, 312 U.S. 262,

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