Due to the costs, time, and uncertainty that a bankruptcy proceeding necessitates, professionals dealing with a financially distressed business often consider alternative schemes that can accomplish some of the same outcomes as in a bankruptcy proceeding, but in a simpler and more efficient manner. One of these alternatives is the creditor composition.

A composition is a contractual settlement between a debtor and its creditors that allows a business to restructure its debt obligations and continue as a going concern.

This Note addresses the process for conducting creditor compositions, including considerations when negotiating with creditors, preparing for creditor meetings, and reaching a creditor consensus.

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