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Debtor-in-Possession Financing

   Also found in: Wikipedia 0.01 sec.
Debtor-in-possession financing
New debt obtained by a firm during the Chapter 11 bankruptcy process, Federal Bankruptcy Rule 4001 (c)(1). This financing is unique because it is secured, that is, it has priority over existing debt, equity and other claims.

Debtor-in-Possession Financing
Financing made available to a debtor in possession, which is 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. A company often requires financing in order to restructure, and DIP financing enables it to do so.


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The company already received from its lenders a commitment of up to $15 million in debtor-in-possession financing, which, when combined with revenue from operations, is expected to support the company through the Chapter 11 process.
People doing debtor-in-possession financing expect to be paid back.
has agreed with its lenders to amend (the "Amendment") the company's debtor-in-possession financing (the "DIP Financing") to extend the maturity until Sept.
 
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