What is a “debtor-in-possession financing statement” in a Chapter 11 bankruptcy?

A debtor-in-possession financing statement in a Chapter 11 bankruptcy is a form that must be filed with the court before a debtor can receive new financing (money or credit) from a creditor. The statement is used to inform the court that the debtor is receiving new financing and provide important details about the terms of the arrangement. The purpose of the statement is to ensure the creditor is aware of the debtors’ bankruptcy status, and to ensure the debtor is not receiving a benefit not specifically allowed by the court. The statement must include details about the creditor, the debtor, the loan amount, and the repayment terms, among other things. For example, the statement must include the amount of the financing, the date it was received, the purpose of the financing, and any security or collateral offered to the creditor. The statement must also include a copy of the paperwork authorizing the financing, such as the promissory note and the security agreement. This statement must then be filed with the bankruptcy court. Once it is approved, the debtor can proceed with receiving the new financing. In some cases, the court may require additional information or provisions to be included in the filing. This statement serves as a way to help protect the creditor’s interests and ensure all terms of the agreement are being followed by the debtor throughout the bankruptcy process. It also helps ensure the debtor does not receive any unfair advantages during the process.

Related FAQs

What is a “debtor-in-possession financing statement” in a Chapter 11 bankruptcy?

Related FAQs

Related Blog Posts