debtor in possession

(redirected from Debtors in Possession)
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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.

References in periodicals archive ?
The Company does not expect any outside directors to be added to the Board at this time, and, as debtors and debtors in possession, will continue to manage and operate its assets and businesses subject to the supervision and orders of the bankruptcy court.
Pursuant to Sections 1107 and 1108 of the Bankruptcy Code, the Company and its subsidiaries, as debtors and debtors in possession, will continue to manage and operate their assets and businesses subject to the supervision and orders of the Bankruptcy Court.
I believe that we made our best efforts to clarify our concerns based on our letters and faxes to the counsel for the debtors in possession, the creditors committee and the US trustee's office.