What is a Debtor-In-Possession?
Upon the filing of a Chapter 11 Bankruptcy Petition the Debtor becomes a Debtor-In-Possession which is exactly as it is stated. The debtor has possession of it’s company and affairs until such time that a trustee is appointed to take control of the Debtor or until the case converts to a Chapter 7. A debtor in possession owes a fiduciary duty to the Bankruptcy Estate and has the powers of a bankruptcy trustee. These duties include accounting for all property, examining claims, objecting to claims, filing tax returns and monthly operating reports as required by the Bankruptcy Court and the United States Trustee. A debtor in possession has the power to employ attorneys, accountants, brokers, or other professionals, subject to Bankruptcy Court Approval. Should a debtor in possession fail to comply with the U.S. Trustee requirements, fail to comply with court orders, or fail to take appropriate steps to propose or submit a plan for confirmation, the U.S. Trustee, a creditor, or party in int
