Debtor-In-Possession Financing - DIP Financing
What is 'Debtor-In-Possession Financing - DIP Financing'
Debtor-in-possession financing (DIP finacing) is 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.