DIP Financing

Overview

When companies file for Chapter 11, they don’t always end up in liquidation. They may reorganize as a viable company or seek to sell their assets. In either case, they will often need debtor-in-possession ("DIP") financing, which can be a highly complex transaction requiring experienced legal counsel for both the debtor and the lender(s).

Our bankruptcy and restructuring attorneys know how to bring these transactions to fruition. While our focus is primarily with pre-petition and post-petition lenders, we also represent debtors and creditor committees across a range of industries including manufacturing, consumer products, energy, retail, technology, and more. We work with our clients to avoid cash collateral fights and limit the number of concessions to the debtor, unsecured creditors, and the bankruptcy court. When a lender provides financing as part of reorganization, we are adept at managing the bankruptcy process, negotiating approvals, and providing financial documentation to provide the protection our clients need.

We take a multidisciplinary approach combining the skills of our bankruptcy and restructuring attorneys with those from other departments such as finance, financial services, litigation, private equity, and cross border, among others, to make sure you receive a comprehensive review of your specific needs and requirements. Many DIP financing transactions occur in Delaware, where we have a significant presence, however, we’re able to handle transactions in jurisdictions around the country. Our clients are banks, agents, financial institutions, private equity and hedge funds, and institutional investors.

How We Can Help 

Our attorneys have broad experience with every aspect of DIP financing, including:

  • defensive DIP financing
  • priming liens
  • restructuring milestones
  • offensive DIP financing “loan to own” strategy
  • loan terms, rates, and maturity dates
  • defaults on DIP agreements
  • asset sales under section 363
  • filings and disclosure documentation
  • intercreditor (multi-layered) agreements
  • roll-ups

What Sets Us Apart

  • Chambers USA notes we have a “stellar bankruptcy and restructuring team handling the full range of issues including Chapter 11 and Chapter 15 matters, as well as related bankruptcy litigation. Maintains a specialty practice advising maritime and transportation clients, and possesses significant knowledge of complex financing transactions.”
  • 2014–2017 Chambers USA recognized the Firm for Bankruptcy/Restructuring both nationally and regionally in Delaware and Pennsylvania.
  • Our bankruptcy practice ranked at the top of The American Lawyer’s Corporate Scoreboard in 2011.
  • Four of the team’s attorneys are fellows of the prestigious American College of Bankruptcy. One partner served as Third Circuit regent of the American College of Bankruptcy and another partner served as chairman of the American College of Bankruptcy Foundation and is a past chair of the American College of Bankruptcy.
  • Many members of the group write and lecture extensively on issues involving corporate restructuring and bankruptcy.

Experience

  • Golfsmith International, counsel to DIP lender in respect of $80 million commitment to support possible stand-alone equity backed plan for international golf equipment and goods retailer (Wilmington, DE).
  • Edwin Watts Golf, counsel to DIP lender in Chapter 11 bankruptcy involving asset sale and GOB sales for approximately 90 retail locations (Wilmington, DE).
  • Anchor Blue Clothing Company, counsel to secured lender paid in full from replacement DIP financing proceeds; Delaware Counsel to Prepetition Lender.
  • Radio Shack, counsel to “first out” lenders in connection with $285 million DIP loan, which was approved after contest where unitranche structure tested (Wilmington, DE).
  • Central Grocers, counsel to agent on a $205 million DIP loan in the retail cooperative's chapter 11 case (Wilmington, DE).
  • Chassix, counsel to the debtor-in-possession lender in connection with a $65 million DIP loan (New York, NY).
  • VeraSun Energy Company, co-counsel to DIP lender to major ethanol producer (Wilmington, DE).
  • Tropicana Entertainment, co-counsel to prepetition agent and DIP lender which provided $1.3 billion loan facility for confirmed chapter 11 case (Wilmington, DE).
  • Pacific Steel, representation of DIP lender in steel foundry in bankruptcy case dealing with MEPPA plans and multiple debtors (Oakland, CA).