Debtor-in-Possession Financing in Bankruptcy

Handbook on Corporate Bankruptcy Law (Edward Elgar, Forthcoming)

Stanford Public Law Working Paper

23 Pages Posted: 2 Jun 2017 Last revised: 27 Mar 2018

Date Written: November 2017

Abstract

This chapter is forthcoming in an edited research handbook on corporate bankruptcy law. It reviews the theoretical and empirical scholarship on debtor-in-possession (DIP) financing, particularly as it bears on the more controversial features of DIP loans: financial terms such as cross-collateralization, roll-ups and avoidance protection, and control provisions in covenants that impose milestones and deadlines on the bankruptcy process. The paper highlights two fundamental challenges: what contract provisions are needed to mitigate the liquidity problem of the distressed debtor and whether these provisions lead to an inefficient distortion of asset-deployment decisions in bankruptcy.

Keywords: debtor-in-possession financing, corporate reorganization, bankruptcy, debt financing

JEL Classification: G33, G32, K2

Suggested Citation

Triantis, George G., Debtor-in-Possession Financing in Bankruptcy (November 2017). Handbook on Corporate Bankruptcy Law (Edward Elgar, Forthcoming), Stanford Public Law Working Paper, Available at SSRN: https://ssrn.com/abstract=2977686

George G. Triantis (Contact Author)

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
386
Abstract Views
1,206
rank
85,432
PlumX Metrics