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Leverage and Lenders of Last Resort

Prior to the current global recession, companies filing for Chapter 11 bankruptcy protection were able to secure financing with relative ease. In recent years, a competitive market for DIP lending had developed among investment banks, private equity firms, hedge funds and traditional lenders such as GE Capital.

26 minute read November 23, 2009 at 01:40 PM
By
John J. Rapisardi And Peter M. Friedman
Leverage and Lenders of Last Resort

Historically, lenders have considered debtor-in-possession (DIP) financing an attractive and typically lucrative investment because DIP lenders generally are first in line for repayment when the company emerges from bankruptcy or liquidates.

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