debtor 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 ?
or the debtor in possession" for the words "the trustee."
possession" and not simply "the debtor in possession."
debtor or the debtor in possession." (331) Similarly, when the
debtor and debtor in possession." Bonneville Power Admin.
Presumably, the cost of such renovations will be financed from the new Debtor in possession financing.
It is specifically empowered to consult with the debtor in possession concerning the administration of the case.
Once the bankruptcy judge determines that all criteria have been met for involuntary bankruptcy - and the procedural rules require that trial be held "at the earliest practical time" - he will appoint a trustee or may designate the debtor as "debtor in possession" to act henceforth for the benefit of creditors in reorganization cases.