What are the first things a debtor in possession needs to do after filing chapter 11?
• Employment of Professionals: The debtor’s bankruptcy professionals need to be formally approved by the court to represent the debtor and debtor in possession. Such professionals usually include bankruptcy attorneys and accountants, and may sometimes include brokers, auctioneers, and special counsel. • Obtaining Use of Cash Collateral: Frequently, debtors have borrowed money from lenders whose loan is secured by assets of the debtor, including cash and accounts receivable, as well as inventory. The debtor must negotiate with the lender and file a motion to use cash collateral. The motion needs to specify how the debtor will protect the lender’s interest in cash collateral, such as providing a “replacement lien” on any cash obtained from the future operation of the business. • Setting Up DIP Accounts: The debtor in possession (“DIP”) must report once a month on cash income and cash expenses. To that end, the debtor sets up DIP accounts and reports each month in “Operating Reports” file
