Debtor In Possession - DIP
An individual or corporation that has filed for Chapter 11 bankruptcy protection and remains in control of property that a creditor has a lien against, or retains the power to operate a business. A debtor who files a Chapter 11 bankruptcy case becomes the debtor in possession (DIP). The DIP continues to run the business and has the powers and obligation of a trustee to operate in the best interest of any creditors. A DIP can operate in the ordinary course of business, but is required to seek court approval for any actions that fall outside of the scope of regular business activities. The DIP must also keep precise financial records and file appropriate tax returns.
After filing for Chapter 11 bankruptcy, new bank accounts are opened that name the debtor in possession on the account. A debtor in possession can be terminated and the court will appoint a trustee in the event that assets are improperly managed or the debtor in possession is not following court orders. The United States Trustee's office maintains guidelines that specify the duties of a debtor in possession.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
debtor in possession — debtor in possession: a debtor who remains in possession of an estate during chapter 11 or 12 bankruptcy and has the same duties as a trustee in bankruptcy Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. debtor in possession … Law dictionary
debtor in possession — In some bankruptcy proceedings, the debtor, rather than a trustee, may continue to operate the business. The debtor in possession is the same person or company that controlled the business prior to the bankruptcy, however, the debtor in… … Financial and business terms
debtor-in-possession — In some bankruptcy proceedings, the debtor, rather than a trustee, may continue to operate the business. The debtor in possession is the same person or company that controlled the business prior to the bankruptcy, however, the debtor in… … Financial and business terms
debtor in possession — The term applied to a debtor who continues in possession while proceedings are had in the bankruptcy court to perfect a reorganization or arrangement whereby his financial affairs may be rehabilitated … Ballentine's law dictionary
debtor in possession — In bankruptcy proceedings, a debtor who has filed for the right to submit a plan for reorganization or refinancing under Chapter 11, and is allowed to continue to manage her or his business without an appointed trustee … Business law dictionary
debtor in possession — noun A natural person or corporation that has filed a bankruptcy petition, but remains in possession of property upon which a creditor has a lien or similar security interest. Such a business may continue to operate its business under Chapter 11… … Wiktionary
Debtor in possession — A firm that is continuing to operate under Chapter 11 bankruptcy process. The New York Times Financial Glossary … Financial and business terms
debtor in possession finance — Principally a US term to describe new finance provided to a company in the protection of the courts under Chapter 11 of the US Federal Bankruptcy Code, on the basis that repayment of new money advanced to the debtor in possession takes priority… … Law dictionary
debtor — debt·or n: a person who owes a debt see also bankrupt compare creditor, obligee, obligor ◇ The Bankruptcy Act of 1978 calls the person concerned in a bankruptcy case the “debtor” as opposed to the “bankrupt.” … Law dictionary
possession — pos·ses·sion /pə ze shən/ n 1: the act, fact, or condition of having control of something: as a: actual possession in this entry b: constructive possession in … Law dictionary
debtor — One who owes a debt to another who is called the creditor; one who may be compelled to pay a claim or demand; anyone liable on a claim, whether due or to become due. First Nat. Bank & Trust Co. in Macon v. Kunes, 128 Ga.App. 565, 197 S.E.2d 446,… … Black's law dictionary