Tag Archives: DIP
DIP Financing in Chapter 11 Offers a Lifeline, But With Strings Attached
Debtor-in-possession (DIP) financing is a special form of loan that may be available to a company going through Chapter 11 bankruptcy. Its purpose is to enable the company to meet operational needs, payroll, supplier payments and other critical expenses and eventually emerge as a viable entity. This financing is often necessary because traditional sources of […]
Benefits of Conducting a 363 Sale of Assets in a Chapter 11
A debtor-in-possession (DIP) in a Chapter 11 bankruptcy proceeding can seek court approval to sell some or all of the company’s assets at auction through a process known as a 363 sale. Named after Section 363 of the U.S. Bankruptcy Code, it facilitates the efficient liquidation of assets, often resulting in higher recovery values and […]
The Basics of DIP Financing During a Chapter 11
In a Chapter 11 bankruptcy, the person or corporation under bankruptcy protection is usually designated a debtor-in-possession (DIP), which means they can continue to manage the business freely though subject to obtaining court approval for major decisions. But a successful reorganization of the business requires infusion of additional capital. DIP financing is a remedy for […]
Your Responsibilities as a Debtor in Possession During Chapter 11
The role of the debtor in possession (DIP) is essential to the success of a Chapter 11 bankruptcy. In most cases, the debtor’s business continues to be operated by its owner, who acts as the proxy of the bankruptcy trustee. However, the DIP also takes on a fiduciary duty to act in the best interests […]
