This means that the new loan gets to jump in front of any mezzanine financing and any senior mortgages in the debt stack. It is important to understand that DIP financing is used to provide new operating capital and is not intended to pay off any current debt or obligation associated with the sponsor or entity.
Prospective clients with questions concerning their financing options for debtor in possess chapter 11 financing can contact Winston Rowe & Associates at 248-246-2243 or visit them on line at http://www.winstonrowe.com
DIP financing is unique from other financing methods in that it usually has priority over existing debt, equity and other claims. DIP financing is considered attractive because it is done only under order of the Bankruptcy Court, which is empowered by the Bankruptcy Code. Debtor-in-Possession financing can also provide corporate bankruptcy financing to engage in a prepackaged business bankruptcy where the asset based lender providing DIP financing supplies the funds to work out a settlement with creditors up front, in order to walk into corporate bankruptcy court with this pre-packed settlement.
Asset based lending sources provide Debtor-In-Possession financing following the filing of either a voluntary or involuntary corporate bankruptcy proceeding utilizes the same fundamental asset valuation approach to provide the loan as it would utilize for a company not in business bankruptcy.
The availability of DIP financing may depend on the perceived viability of the company
during the proceeding and on its ability to successfully complete a Plan of Reorganization (POR). The Plan of Reorganization must specify how the debtor intends to pay the creditors and Debtor-in-Possession financing is a means toward that end.
Potential Applications:
Bankruptcy Financing: Voluntary or Involuntary Bankruptcy
Plan of Reorganization
Restructuring
Turnaround Financing
Winston Rowe & Associates also has an excellent knowledge based free investor resource for commercial real estate investing, valuation and analysis located at:
http://www.winstonrowe.com/
Winston Rowe & Associates
31408 Harper Ave
Suite 147
Saint Clair Shores MI 48082
248-246-2243
processing@winstonrowe.com
Winston Rowe & Associates has no upfront fee debtor in possession financing in the following states.
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming
