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Debtor-in-Possession (DIP) Financing Debtor-In-Possession (DIP) financing is offered by GE to companies in business bankruptcy for the purpose of bankruptcy financing. In most cases, 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-Possesion 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 prepacked settlement. An asset based lender providing 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
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