As of Friday (04/03/20), the Coronavirus Aid, Relief and Economic Security (CARES) Act that is providing funding for businesses, did not address debtor-in-possession (“DIP”) lending to businesses operating in Chapter 11 of the United States Bankruptcy Code.
We are hoping to see this need addressed in future legislation.
At this time companies that may need to seek protection from creditors under Chapter 11 of the United States Bankruptcy Code, should be considering how to preserve working capital and/or how to raise DIP funding.
Chapter 11 Bankruptcy Reorganizations – DIP Challenges