Debtor-in-possession management (US)

Comparative law notes


(Debtor-in-Possession is often abbreviated as "DIP") "a person or corporation that has filed for Chapter 11 bankruptcy protection but still holds property to which creditors have a legal claim under a lien or other security interest. A DIP may continue to do business using those assets. However, it is required to seek court approval for any actions that fall outside the scope of regular business activities. The DIP must also keep precise financial records, insure any property, and file appropriate tax returns.... Debtor in possession (DIP) is typically a transitional stage in which the debtor attempts to salvage value from assets after bankruptcy. Although DIPs often exercise substantial influence over assets in their possession, creditors can ultimately use courts to force the sale of DIP assets. The key advantage to DIP status is to be able to continue running a business, albeit with the power and obligation to do so in the best interest of any creditors." investopedia