Debtor in possession (DIP) refers to a situation in bankruptcy proceedings where the debtor, who is financially distressed and unable to meet its obligations, retains control over its assets and continues to operate its business. Being a debtor in possession grants certain powers and responsibilities, such as the ability to enter into contracts, incur debts, and make operational decisions, while still being subject to oversight by the bankruptcy court and creditors.
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This glossary post was last updated: 29th March 2024.
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