debtor in possession

(redirected from Debtors in Possession)
Also found in: Legal.

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 Ninth Circuit's decision in In re Greene closes a loophole that bankruptcy trustees and debtors in possession have uncovered, and some courts have accepted, to expand the 90day preference period and the 10-or 20-day periods for sending a reclamation demand by up to a few extra days when the last day of the period falls on a Saturday, Sunday or legal holiday.
* Bankruptcy trustees and Chapter 11 debtors in possession of their indebted property would have to pay tax obligations in the course of the debtor's business.