Are there any restrictions on how much I can borrow during a Chapter 11 bankruptcy?

Yes, there are restrictions on how much you can borrow during a Chapter 11 bankruptcy. In Oregon, Chapter 11 bankruptcy law sets limits on the amount of new debt that debtors can incur. This amount is known as the “debtor-in-possession” (DIP) loan. The DIP loan is usually set at the amount needed to fund a successful reorganization of the company and pay creditors. The DIP loan must be approved by the court and secured by senior liens against the debtor’s assets. Senior liens are given priority over other creditors when it comes to collecting payments. Additionally, any other new debt incurred during the bankruptcy must also be approved by the court. The amount of debt that can be incurred during a Chapter 11 bankruptcy depends on the debtor’s financial condition and ability to repay. The court will consider the debtor’s assets, liabilities, income, and expenses when making a decision. The court may also consider the potential impact of the additional debt on the creditors. In addition to limits on borrowing, debtors are also prohibited from making certain transfers of assets during a Chapter 11 bankruptcy. These restrictions are in place to protect creditors from unfair or preferential treatment. Chapter 11 bankruptcy law in Oregon ensures that debtors are only able to incur a certain amount of new debt. The limits ensure that creditors are not disadvantaged by any additional debt that a company may incur while restructuring.

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