Document background
The Debtor in Possession Loan Agreement is a critical instrument in Swiss restructuring and insolvency practice, used when a company requires additional financing during financial distress or formal restructuring proceedings. This document is essential for companies seeking to maintain operations while working through financial difficulties, providing a framework for new lending that typically receives priority status under Swiss law. The agreement must comply with Swiss bankruptcy regulations and often requires court approval. It includes comprehensive provisions covering loan terms, security arrangements, monitoring requirements, and specific protections for the lender given the borrower's distressed status. The document is particularly relevant in scenarios where there is a viable business that requires working capital to implement a restructuring plan or maintain operations during insolvency proceedings.
