Law360 (May 25, 2021, 3:48 PM EDT) -- A recent decision by the U.S. Bankruptcy Court for the District of Delaware highlights the important consequences that can flow from a debtor-in-possession, or DIP, finance stipulation reached early in a case. The decision, In re: Jevic Holding Corp. held that a Chapter 7 trustee was barred by the terms of a Chapter 11 DIP financing order from pursuing a clawback action against lenders.
It provides protection to lenders and guidance to creditors' committees negotiating DIP finance agreements, and suggests additional considerations for a court in deciding whether to convert a case to Chapter 7.
In 2006, Jevic Holding Corp.,...
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