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DIP Financing

Tim Grahlich, a partner at Davis Polk & Wardwell, presents an overview of debtor-in-possession (DIP) financing, focusing on four aspects: participants and motivations, statutory framework, key DIP terms and select § 363 concepts. DIP financing is post-petition debt incurred by a chapter 11 debtor, often necessary when the debtor lacks sufficient liquidity. Lenders are attracted by the security of liens on assets and the potential for super-priority status. Key concepts include cash collateral, adequate protection and the ability to equitize DIP loans. The presentation also covers §§ 364 and 363 of the Bankruptcy Code, and the importance of local rules in such jurisdictions as New York and Delaware.

Tags:
Keywords:

debtor in possession, post-petition financing, adequate protection, cash collateral, super-priority status, statutory mootness, defensive DIP, pre-petition lenders, roll-ups, cross-collateralization, equitizing DIPs, Bankruptcy Code, chapter 11, liquidity

Duration:

43 minutes 57 seconds

Timothy E. Graulich is a Restructuring partner with Davis Polk & Wardwell LLP in New York and head of International Restructuring. He is experienced in U.S. and cross-border restructurings, including in Bermuda, Brazil, Canada, Cayman Islands, China, Curacao, England, Hong Kong, Ireland, Italy, Japan, Luxembourg, New Zealand, the Netherlands, Mexico and Mongolia. He has represented public and private companies, agent banks and lenders, acquirers and hedge funds in connection with prepackaged and traditional bankruptcies, out-of-court workouts, DIP and exit financings, bankruptcy litigation and §363 sales. Mr. Graulich was named an “Outstanding Restructuring Lawyer” by Turnarounds & Workouts in 2013 and 2018. He is an INSOL Fellow, co-chair of the USA/Canada/Caribbean Regional Committee of the International Insolvency Institute, and co-chair of the Insolvent Financial Institutions Subcommittee of the Insolvency Section of the International Bar Association. Previously, Mr. Graulich was counsel at Davis Polk & Wardwell and an associate with Weil, Gotshal & Manges. He received his B.A. summa cum laude in philosophy and political science from St. John’s University, his J.D. from St. John’s University School of Law, where he was a St. Thomas More Scholar and a member of the ABI Law Review, and his LL.M. in Bankruptcy from St. John’s University School of Law.

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