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Debtor-In-Possession Financing - DIP Financing

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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.
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Investopedia explains '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.

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