Exit Financing

Summary

This practice note discusses exit financing. Exit financing is the process whereby a debtor obtains enough financial support to successfully emerge from bankruptcy. Exit financing is often used to make the required payments under a Chapter 11 plan, which can include the payoff of a debtor in possession (DIP) loan and the payment of other allowed claims. Exit financing can also be used to fund the reorganized debtor's business operations after emergence from Chapter 11, as well as providing funds for working capital and capital expenditures post-bankruptcy.