DIP financing: concept discipline and some practical example
Mar 5, 2024 7:12:26 GMT 1
Post de account_disabled el Mar 5, 2024 7:12:26 GMT 1
An extremely frequent contractual expedient in the context of judicial recovery is the obtaining of credit by the debtor in recovery through the contracting of financing ie an onerous loan. This is on many occasions one of the main ways of making up for the company's lack of cash in order to finance operational expenses and facilitate its restructuring including with a view to regular compliance with the judicial recovery plan "PRJ" or "Flat".
Due to the influence of the American experience on the subject the use of the expression “ debtor-in-possession DIP financing” became popular . This expression at least as applied in national practice corresponds to financing contracted by a debtor undergoing judicial recovery.
The origin of the expression can be summarized B2B Email List as follows: “ debtor-in-possession DIP” is the name adopted for the businessman who submits a request for restructuring functionally equivalent to our judicial recovery based on “ Chapter ″ — metonymic and already famous name referring to Chapter of Title of the Code of Laws of the United States of America “ US Code” . The “ debtor-in-possession DIP” precisely due to the recovery system remains in the administration that is remains in possession — “ in possession” of the assets thus differentiating himself from the bankrupt businessman.
It is understandable in these terms why the financing “ Financing” obtained by the businessman undergoing judicial recovery “ debtor-in-possession DIP” is commonly referred to as “ DIP Financing” — or even “DIP Financing” in a peculiar mix of the vernacular and the English expression. As this is a common expression in practice we will henceforth prioritize the mention of “DIP Financing”.
Linguistic issues aside it is true that the expression “DIP Financing” can be used to refer to a myriad of types of financing granted to the debtor undergoing judicial recovery with the forms of forecasting and approval of DIP Financing also being very plural.
DIP Financing in the context prior to the reform promoted by Law No.
Despite the recurrence and practical relevance of DIP Financing Law No. “Business Recovery and Bankruptcy Law” or “LREF” in its original wording did not contain an express provision that covered the topic in detail. The regulatory scenario would only change in good time with the legislative reform promoted by Law No.
Due to the influence of the American experience on the subject the use of the expression “ debtor-in-possession DIP financing” became popular . This expression at least as applied in national practice corresponds to financing contracted by a debtor undergoing judicial recovery.
The origin of the expression can be summarized B2B Email List as follows: “ debtor-in-possession DIP” is the name adopted for the businessman who submits a request for restructuring functionally equivalent to our judicial recovery based on “ Chapter ″ — metonymic and already famous name referring to Chapter of Title of the Code of Laws of the United States of America “ US Code” . The “ debtor-in-possession DIP” precisely due to the recovery system remains in the administration that is remains in possession — “ in possession” of the assets thus differentiating himself from the bankrupt businessman.
It is understandable in these terms why the financing “ Financing” obtained by the businessman undergoing judicial recovery “ debtor-in-possession DIP” is commonly referred to as “ DIP Financing” — or even “DIP Financing” in a peculiar mix of the vernacular and the English expression. As this is a common expression in practice we will henceforth prioritize the mention of “DIP Financing”.
Linguistic issues aside it is true that the expression “DIP Financing” can be used to refer to a myriad of types of financing granted to the debtor undergoing judicial recovery with the forms of forecasting and approval of DIP Financing also being very plural.
DIP Financing in the context prior to the reform promoted by Law No.
Despite the recurrence and practical relevance of DIP Financing Law No. “Business Recovery and Bankruptcy Law” or “LREF” in its original wording did not contain an express provision that covered the topic in detail. The regulatory scenario would only change in good time with the legislative reform promoted by Law No.
