Debtor-In-Possession Financing
/ˈdɛtər ɪn pəˈzɛʃən ˈfaɪnænsɪŋ/
Definitions
- (n.) A financing arrangement allowing a debtor who retains possession and control of assets during bankruptcy to obtain new credit, usually with priority over existing debts.
The company secured debtor-in-possession financing to maintain operations while restructuring its debts in bankruptcy.
Forms
- debtor-in-possession financings
Related terms
Commentary
Typically arises in Chapter 11 bankruptcy cases, providing liquidity crucial to debtor's reorganization efforts; priority status is a key drafting and negotiation focus.
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