creditors’ committee

A group that represents all the firms that have lent money to a company that is in bankruptcy or nearing bankruptcy. A creditors’ committee negotiates on behalf of all the lenders owed money, and thus has considerable clout. Typically only the largest creditors are represented on the creditors’ committee.

A life insurance policy that is held for the benefit of the company granting credit to the insured. If the insured borrower dies before paying off the loan or debt, then the policy will be paid to the creditor so the loan balance can be paid off.