Search results
Results from the WOW.Com Content Network
A debtor in possession or DIP in United States bankruptcy law is a person or corporation who has filed a bankruptcy petition, but remains in possession of property upon which a creditor has a lien or similar security interest. A debtor becomes the debtor in possession after filing the bankruptcy petition.
The willingness of governments to allow lenders to place debtor-in-possession financing claims ahead of an insolvent company's existing debt varies; US bankruptcy law expressly allows this [8] while French law had long treated the practice as soutien abusif, requiring employees and state interests be paid first even if the end result was liquidation instead of corporate restructuring.
The Court of Appeal said that the bank could obtain effective security in other ways. If the deposit was made by the principal debtor, it could rely upon contractual rights of set-off or combining accounts or rules of bankruptcy set-off under provisions such as rule 4.90.
GE Capital Provides $150 Million Debtor-in-Possession Financing to Vertis Holdings, Inc. NORWALK, Conn.--(BUSINESS WIRE)-- GE Capital, Restructuring Finance today announced it is administrative ...
The debtor in possession runs the day-to-day operations of the business while creditors and the debtor work with the Bankruptcy Court in order to negotiate and complete a plan. Upon meeting certain requirements (e.g., fairness among creditors, priority of certain creditors) creditors are permitted to vote on the proposed plan. [ 57 ]
A debtor in possession can acquire financing and loans on favorable terms by giving new lenders first priority on the business's earnings. The court may also permit the debtor in possession to reject and cancel contracts. Debtors are also protected from other litigation against the business through the imposition of an automatic stay.
In finance, a security interest is a legal right granted by a debtor to a creditor over the debtor's property (usually referred to as the collateral [1]) which enables the creditor to have recourse to the property if the debtor defaults in making payment or otherwise performing the secured obligations. [2]
Additionally, in US Chapter 11 bankruptcies, new lenders can come in to fund the continuing operation of companies and be granted status super-senior to other (even senior secured) lenders, so-called "debtor in possession" status. Similar regimes exist in other jurisdictions.