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 Official Committee of Unsecured Creditors of Delta Air Lines Inc and its affiliated debtors and debtors-in-possession has confirmed that it will support the standalone plan of reorganisation as finally agreed upon between Delta and the Creditors' Committee that will be filed later this week.
JUDGE CLARK: I think debtors-in-possession and trustees have a tendency to overreach because they're so desperate to get vendor financing during the course of the bankruptcy case.
SAExploration Holdings announced that the United States Bankruptcy Court for the Southern District of Texas, Houston Division, entered an order approving the previously announced Asset Purchase Agreement, dated June 26, 2018, between its wholly owned subsidiary, SAExploration, and Geokinetics, and certain of its subsidiaries, debtors and debtors-in-possession, pursuant to which the company will acquire certain of GEOK's assets.
Some bankruptcy trustees and debtors-in-possession have used fancy footwork to extend the 90-day preference period a few extra days, either by counting backward from the date of the bankruptcy filing or counting forward from the date of the payment.
Debtors-in-possession sometimes think they control their destiny and that creditors will accede to their every demand or whim.
* Indiscriminate review by trustees, debtors-in-possession and creditors' committees of check registers of debtors to bring preference actions, with no responsible review of potential defenses.
These decisions should force many or most bankruptcy courts to enforce the two-year rule against debtors-in-possession.