In the Karmaloop, Inc. bankruptcy proceeding, a formation meeting has been scheduled for Wednesday, April 1, 2015 at 10:30 a.m. (ET) at the DoubleTree Hotel, 700 King St., Salon C, Wilmington, DE 19801. Click Here for a copy of the Notice of Formation Meeting for Official Committee of Unsecured Creditors issued by the Office of the United States Trustee. If you want to be considered for Committee membership, you MUST complete a questionnaire and return it to the U.S. Trustee no later than March 30, 2015 at 5:00 p.m. (ET).
In addition, the U.S. Trustee has requested that a Section 341 Meeting of Creditors be scheduled for Thursday, April 16, 2015 at 10:30 a.m. (ET) at the J. Caleb Boggs Federal Court House, 844 N. King Street, 2nd Fl., Room 2112, Wilmington, DE 19801.
One way in which creditors can assert their interests is to attend the Formation Meeting and become a part of the creditors’ committee. The creditors’ committee is one of the most active participants in a corporate bankruptcy, and has access to a significant amount of information not available to normal creditors. There are, naturally, trade-offs to gaining access to this information (including limitations on a company’s ability to trade in securities of the debtor), but you will be far better informed of what occurs in the bankruptcy proceeding.
Another way creditors can assert their interests is to attend the Section 341 Meeting of Creditors to depose the debtor’s representative regarding the assets and liabilities of the bankruptcy estate. Creditors may retain counsel to conduct such an examination of the debtor’s representative. The Section 341 meeting of creditors is an integral component of a bankruptcy proceeding.
General topics that are discussed during a Section 341 meeting may include the following:
- The nature and scope of a debtor’s assets and liabilities;
- The amount of accounts receivable and accounts payable;
- The extent that the debtor is able to repay its creditors;
- Whether insurance remains active;
- The condition and location of goods received in the 20-45 days before bankruptcy;
- The debtor’s or trustee’s plan to reorganize its debt or liquidate its assets;
- The debtor’s plan after it emerges from bankruptcy (not applicable to a Chapter 7 debtor);
- Whether the debtor experienced any changes in revenue since filing for bankruptcy; and
- Potential avoidance actions to be commenced by the debtor or trustee