Introducing The Parties To A DIP Financing

Law360, New York (June 19, 2013, 6:25 PM EDT) -- Inherent in any debtor-in-possession financing is more complexity than a simple loan from a lender to a borrower. Numerous parties may be involved, each with different roles and interests.

Borrower/Debtor

The borrower under a DIP loan is typically a “debtor-in-possession” under Chapter 11 of the Bankruptcy Code, unless the bankruptcy court has appointed a trustee to oversee the administration of the debtor’s assets. 11 U.S.C. § 1101(1). However, even in the case of a trustee appointment, the named borrower under the loan documents technically will remain...
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