Our company has become an insolvent debtor: Can we get financing?

By Mark Borkowski ( August 15, 2022, 10:54 AM EDT) -- Debtor in Possession (DIP) financing describes the financing obtained by an insolvent debtor while that debtor is restructuring its business. The term DIP financing originated from the American practice in Chapter 11 proceedings under the U.S. Bankruptcy Code. During a Chapter 11 proceeding, the debtor is referred to as a debtor in possession or DIP, since the debtor is continuing “in possession” of the business while the business is being restructured. During this time, a DIP is empowered to continue to operate the business and may use, sell, or lease property to the extent that doing so is in the ordinary course of the debtor’s business....