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Debtor-in-possession financing or DIP financing is a special form of financing provided for companies in financial distress, typically during restructuring under corporate bankruptcy law (such as Chapter 11 bankruptcy in the US or CCAA in Canada [1]).
A debtor in possession or DIP in United States bankruptcy law is a person or corporation who has filed a bankruptcy petition, but remains in possession of property upon which a creditor has a lien or similar security interest. A debtor becomes the debtor in possession after filing the bankruptcy petition.
Chapter 11 affords the debtor in possession a number of mechanisms to restructure its business. A debtor in possession can acquire financing and loans on favorable terms by giving new lenders first priority on the business's earnings. The court may also permit the debtor in possession to reject and cancel contracts.
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The vast majority of Chapter 11 bankruptcy cases filed end up allowing company management to go forward running the business as usual; however, in certain exceptional cases (fraud, gross incompetence, etc.) the courts do not allow the business the privilege of simply maintaining a "debtor in possession" status. In said cases, a trustee is ...
In a filing late Wednesday evening, lawyers with the Justice Department agreed to a proposed order that would largely prohibit the Treasury Department from sharing sensitive financial data with ...
arrangements similar to debtor-in-possession financing for sustaining the company's operations [48] [49] (also known as a "DIP charge") payments to specified suppliers for continuing to provide goods or services that are critical to the company's operation [50]
(The Center Square) – State lawmakers are forwarding a bill that would change how medical debt impacts Washingtonians' credit scores. Senate Bill 5480 doesn’t erase medical debt completely but ...