With Creditors Form

• Category: Contracts - Composition with Creditors
• State: Multi-State
• Control #: US-0932BG
• Format: Word; Rich Text

Description

A composition agreement is an agreement made between an embarrassed or insolvent debtor and two or more of his creditors that each of the creditors entering into the agreement will be paid a specified amount, less than the whole of their claims, and the creditors agree to accept such payment in full satisfaction of their claims. The agreement works substantially an accord for which the consideration is the satisfaction to be made by the debtor, and such an accord is no bar to suit on the original debt, unless the satisfaction is performed. Composition with Creditors -- Creditors' Committee to Carry on Debtor's Business is a type of debt restructuring agreement where the creditors of a company form a committee and agree to a reduced payment of the debt, in exchange for the company continuing to operate. The creditors agree to accept a certain amount of the debt as full payment and the company continues to operate with the creditors’ committee managing the operation. This type of restructuring allows the company to remain in business while the creditors receive a reduced amount of what is owed to them. Depending on the agreement, the creditors may also receive equity in the company in exchange for their debt. There are two types of Composition with Creditors -- Creditors' Committee to Carry on Debtor's Business. The first type is an informal agreement where all creditors agree to the terms of the restructuring. The second type is a formal agreement, which is approved by a court and requires the debtor to file a petition for reorganization under Chapter 11 of the Bankruptcy Code. In this case, the creditors’ committee is appointed by the court and must be approved by the court before the restructuring can take effect.

Composition with Creditors -- Creditors' Committee to Carry on Debtor's Business is a type of debt restructuring agreement where the creditors of a company form a committee and agree to a reduced payment of the debt, in exchange for the company continuing to operate. The creditors agree to accept a certain amount of the debt as full payment and the company continues to operate with the creditors’ committee managing the operation. This type of restructuring allows the company to remain in business while the creditors receive a reduced amount of what is owed to them. Depending on the agreement, the creditors may also receive equity in the company in exchange for their debt. There are two types of Composition with Creditors -- Creditors' Committee to Carry on Debtor's Business. The first type is an informal agreement where all creditors agree to the terms of the restructuring. The second type is a formal agreement, which is approved by a court and requires the debtor to file a petition for reorganization under Chapter 11 of the Bankruptcy Code. In this case, the creditors’ committee is appointed by the court and must be approved by the court before the restructuring can take effect.