DIP financing agreements

DIP (Debtor-in-Possession) financing agreements provide a company in bankruptcy with short-term funding to continue operations during restructuring. These loans help cover essential expenses like payroll, inventory, and vital services, enabling the company to stabilize and develop a recovery plan. DIP financing typically has priority over existing debts, meaning lenders get paid first once the company emerges from bankruptcy. These agreements are critical for facilitating a smoother restructuring process, giving the company the financial support needed to reorganize while in bankruptcy protection.