The "Devil's Dictionary" is a quick-reference guide for commercial lenders and other restructuring professionals. In this series, we highlight many of the buzz words found in the Dictionary and used in today's bankruptcy arena.

DIP:
Acronym for debtor in possession. Pronounced by stating its initials — “D-I-P.”

Debtor In Possession
A Chapter 11 debtor that remains in possession of its property and operates its business after commencing a Chapter 11 case. Often referred to as the D-I-P (pronouncing each letter). Appointment of a Chapter 11 Trustee reduces a debtor in possession to a mere “debtor.” 

In Chapter 11 cases where the debtor remains in possession, the debtor (with minor exceptions) has the rights, powers, and functions of a trustee appointed under the Code. The Code often references only the rights and functions of “the trustee,” but in Chapter 11 cases those references should be read as “the trustee or debtor in possession.”