debtor in possession

(redirected from 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 ?
Lawyers for the company and the unsecured creditors committee said in a court hearing on May 7 that they had reached an agreement to amend some of the loan terms, allowing the debtor-in-possession funding to be approved.
GE Capital, Restructuring Finance has provided a USD505m debtor-in-possession (DIP) credit facility to Borders Group Inc, a specialty book retailer.
If you or your client is a creditor, a proof of claim should be filed with the estate so that the claim is recognized and can be reviewed by the trustee or debtor-in-possession, who will then either approve or dispute it and classify it according to type of claim.
Based in Montreal, AbitibiBowater sought similar protection in Quebec, where a court last month approved $100 million in debtor-in-possession financing backed by the provincial government.
The trustee or debtor-in-possession must prove that the pre-petition transfer of property under the settlement agreement was a transfer of an interest of the debtor in property.
According to the commitment letter, eligible inventory will be based on "standards at least as favorable" as Kmart's current debtor-in-possession facility.
With certain limited exceptions, the debtor-in-possession acts as the trustee.
The company also announced that it has entered into a commitment letter with certain of the DIP lenders to finance an amended and restated debtor-in-possession credit agreement in an aggregate principal amount of $90 million (the "Restated DIP").
will provide the companies with $5 million in debtor-in-possession financing.
The company said it plans to continue operating as debtor-in-possession during its reorganization.
UAL Corp, the parent company of US airline United Airlines, has received approval to amend and extend its debtor-in-possession financing to 30 September 2005.
The "estate" resolves the pre-petition issues, and the debtor-in-possession maintains the post-petition company and works towards the re-organization (for a Chapter 11 case) by management of the company.