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debtor in possession

   Also found in: Dictionary/thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia 0.01 sec.
Debtor in possession
A firm that continues to operate under the Chapter 11 bankruptcy process.

Debtor in Possession
A company that maintains its operations during a Chapter 11 bankruptcy. A debtor in possession is generally attempting to fulfill its reorganization plan, discharging certain debts and changing any structural weaknesses to put it on a path to profitability. As such, a debtor in possession is drastically different from a company in liquidation, which ceases operations and sells all its assets.

debtor in possession
A company that continues to operate while in Chapter 11 bankruptcy.

debtor in possession (DIP)

(To pronounce the abbreviation always say each letter; it is not pronounced as a word.) In bankruptcy,a Chapter 11 debtor who remains in possession of his or her property and continues to operate a business or sell the property. The DIP must still obtain court approval for nonroutine transactions but is able to conduct business, receive monies, and pay bills, including a reasonable salary for the debtor. Contrast with the situation in which a bankruptcy trustee is appointed;in this case the trustee is then in control of all assets of the debtor.



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Cuticelli's company, Cuticelli Capital, provided debtor in possession financing and was the "Stalking Horse Bidder" after Sheldon Good & Company declared Chapter 11 bankruptcy in April.
A federal bankruptcy judge has approved debtor in possession financing worth $4.
It''s a known fact that companies that obtain bankruptcy financing have a much higher chance of emerging out of chapter 11 as a viable company than those that don''t secure debtor in possession financing.
 
 
 
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