Debtor-in-possession financing or DIP financing is a special form of financing provided for companies in financial distress, typically during restructuring under corporate bankruptcy law (such as Chapter 11 bankruptcy in the US or CCAA in Canada). Usually, this debt is considered senior to all other debt, equity, and any other securities issued by a company — violating any absolute priority rule by placing the new financing ahead of a company's existing debts for payment.
It may be used to keep a business operating until it can be sold as a 
American law vs. French law
The willingness of governments to allow lenders to place debtor-in-possession financing claims ahead of an insolvent company's existing debt varies; US bankruptcy law expressly allows this while French law had long treated the practice as soutien abusif, requiring employees and state interests be paid first even if the end result was liquidation instead of corporate restructuring.
- Calpine closes $5 billion DIP financing
- Bankruptcy basics - Operating capital
- 11 USC 364 - Obtaining credit
- Federal Rules of Bankruptcy Procedure - Rule 4001c: Obtaining Credit