Bankruptcy and Restructuring — Glossary

DIP financing is post-petition credit extended to a Chapter 11 debtor to fund operations and reorganization, typically secured by a priming lien on the estate.

A court-appointed receiver takes control of a distressed business or asset to preserve value, operate, or liquidate under judicial supervision for creditors or stakeholders.

What a Chief Restructuring Officer does in distressed companies, how they differ from turnaround consultants, and when a board or creditor appoints one.

A preference action lets a bankruptcy trustee claw back payments made to creditors shortly before filing, under 11 U.S.C. section 547.

A proof of claim is the formal document creditors file under Federal Rules of Bankruptcy Procedure 3001 to establish their right to payment from the bankruptcy estate.

A Section 363 sale lets a bankruptcy debtor sell assets free and clear of liens under court supervision, with faster timelines and stronger buyer protections than ordinary sales.

An ABC is a state-law insolvency proceeding where a company transfers all assets to an assignee for liquidation, outside federal bankruptcy court.

The automatic stay halts creditor action the moment a bankruptcy petition is filed. How it works, its limits, and where practitioners misapply it.