Debtors in Possession

Debtors in Possession (DIP) refers to a situation in bankruptcy where a company continues to operate its business while under court protection. Instead of liquidating assets immediately, the company retains control of its assets and management to try to restructure and regain profitability. This allows them to keep running their operations, pay employees, and service customers while they develop a plan to pay creditors or reorganize their debts. DIP status is intended to provide stability and maximize the value of the business during the bankruptcy process.