Bankruptcy Financing - The Debtor-in-Possession Credit Alternative

Debtor-in-possession financing is utilized when available and necessary in chapter 11 cases, and has come to play an integral role in the restructuring process. In this article, the authors begin by discussing DIP lenders, financing structure, and issues on exit financing. They then turn to DIP financing issues and protections, including the “roll-up,” waivers and releases, and credit bid rights. They close with a discussion of equity conversion rights and the complications that arise when lenders in syndicated groups do not agree.