Lear Capital Slams Customers’ Bid to Form Bankruptcy Committee

Gold and silver coin dealer Lear Capital Inc. urged a federal judge to reject efforts by customers to formally band together in the company’s small business bankruptcy case.

Formal committees give creditors the opportunity in a Chapter 11 case to collectively assert claims while having their expenses covered by the bankrupt estate. They’re common in large corporate bankruptcy cases, but rare in cases filed under Subchapter V—a recently enacted method for small companies to conduct a streamlined Chapter 11 case.

A formal committee is unwarranted for Lear’s bankrutpcy because there is no active customer litigation, the company’s attorney Melissa Davis ...