Asked by Khurram Khalid on Jul 27, 2024
Verified
A debtor who continues to run a business and performs most of the functions that a trustee performs in other types of bankruptcy is called a(n) :
A) debtor in bankruptcy.
B) debtor in possession.
C) unimpaired debtor.
D) suspended debtor.
Debtor in Possession
A business entity that retains control of its assets and continues operations while undergoing a reorganization under bankruptcy laws.
Trustee Functions
The roles and responsibilities carried out by a trustee, typically involving managing assets held in trust on behalf of beneficiaries.
Bankruptcy
A legal status for individuals or entities that cannot repay the debts they owe to creditors, leading to a court-managed distribution of assets to creditors.
- Elucidate the procedure and prerequisites for the debtor-in-possession in accordance with Chapter 11.
Verified Answer
SC
Saadhvi ChariJul 28, 2024
Final Answer :
B
Explanation :
A debtor who continues to run a business and performs most of the functions that a trustee performs in other types of bankruptcy is called a debtor in possession (DIP). This is the case in Chapter 11 bankruptcy, where the debtor retains control of their assets and operations while a plan of reorganization is developed and approved by creditors and the court.
Learning Objectives
- Elucidate the procedure and prerequisites for the debtor-in-possession in accordance with Chapter 11.