DEFINITION of 'Official Committee Of Equity Security Holders'

A small group of the largest shareholders in a company formed to represent all other shareholders during a company's bankruptcy trials. An official committee of equity security holders is typically made up of several of the largest shareholders of a company who stand to have the most to gain or lose during the bankruptcy proceedings, thus would serve as the best proxy for the shareholders as a whole.

BREAKING DOWN 'Official Committee Of Equity Security Holders'

During both Chapter 7 and Chapter 11 bankruptcy proceedings, an official committee of equity security holders will have a say in the direction which the bankrupt company will take to appease their stake holders. While the tactics used by the committee will differ from situation to situation, the ultimate goal for the committee members is to minimize their potential losses from their equity ownership stake in the bankrupt firm.

RELATED TERMS
  1. Shareholders' Agreement

    An arrangement among a company's shareholders describing how ...
  2. Common Shareholder

    An individual, business or institution that holds common shares ...
  3. Creditors' Committee

    A group of people who represent a company's creditors in a bankruptcy ...
  4. Shareholder

    Any person, company or other institution that owns at least one ...
  5. Proxy Fight

    When a group of shareholders are persuaded to join forces and ...
  6. Shareholder Equity Ratio

    A ratio used to help determine how much shareholders would receive ...
Related Articles
  1. Financial Advisor

    An Overview Of Corporate Bankruptcy

    If a company files for bankruptcy, stockholders have the most to lose. Find out why.
  2. Investing

    What is the Shareholder Equity Ratio?

    The shareholder equity ratio shows how much money shareholders will receive if a company has to liquidate its assets.
  3. Small Business

    Taking Advantage Of Corporate Decline

    A bankrupt company can provide great opportunities for savvy investors.
  4. Investing

    Don't Go Broke Buying Bankrupt Stocks

    Don't be tricked by bankrupt companies' low stock prices; they're low for a reason.
  5. Investing

    Who is a Shareholder?

    A shareholder is a person, company or other entity that owns at least one share of a company’s stock.
  6. Managing Wealth

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  7. Taxes

    When To Declare Bankruptcy

    When is bankruptcy the best or only route– and when is it better to look at alternative solutions? And should you always hire a lawyer?
  8. Small Business

    Chapter 11 Bankruptcy: Is It Better To Be a Stockholder or Bondholder? (BTU)

    Discover why energy companies are struggling to stay solvent, while examining the basics of Chapter 11 bankruptcy and its effect on stock and bond holders.
  9. Taxes

    How To Survive A Bankruptcy Filing

    Learn how to make filing for bankruptcy less painful so you can successfully rebuild your financial life.
  10. Taxes

    Changing The Face Of Bankruptcy

    A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you?
RELATED FAQS
  1. What happens to the shares of a company that has been liquidated?

    Learn what happens to a company's shares during Chapter 11 and Chapter 7 bankruptcy proceedings, and understand how much ... Read Answer >>
  2. What happens if I own a stock that is purchased by another company after filing for ...

    In declaring bankruptcy, a company is basically telling the market that it owes more money than it is worth. If the company ... Read Answer >>
  3. What happens to the stock of a public company that goes bankrupt?

    Occasionally, publicly listed companies go bankrupt. The company's shareholders, depending on the type of stock they hold, ... Read Answer >>
  4. What does it signify about the state of a company if it has unusually high shareholders' ...

    Understand the meaning and calculation of shareholder equity and what a high level of shareholder equity signifies about ... Read Answer >>
Hot Definitions
  1. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  2. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  3. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  4. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  5. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center