Debtor-In-Possession Financing - DIP Financing


DEFINITION of 'Debtor-In-Possession Financing - DIP Financing'

Financing arranged by a company while under the Chapter 11 bankruptcy process. DIP financing is unique from other financing methods in that it usually has priority over existing debt, equity and other claims.

BREAKING DOWN 'Debtor-In-Possession Financing - DIP Financing'

Chapter 11 gives the debtor a fresh start, which is, however, subject to the debtor's fulfillment of its obligations under its plan of reorganization.

  1. Time-Sale Financing

    A form of indirect dealer lending or financing used by banks ...
  2. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  3. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
  4. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  5. Debtor In Possession - DIP

    An individual or corporation that has filed for Chapter 11 bankruptcy ...
  6. Debtor

    A company or individual who owes money. If the debt is in the ...
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