Frequently Asked Questions
What are the responsibilities of a debtor in possession?
The responsibilities of a debtor in possession include managing the day-to-day operations of their business, making important business decisions, and developing a reorganization plan to repay creditors. Additionally, they must comply with reporting requirements and seek court approval for certain actions that may impact the bankruptcy estate.
Can a debtor in possession be replaced or removed?
Yes, under certain circumstances, a debtor in possession can be replaced or removed. This typically occurs if the court finds that the debtor in possession has engaged in fraudulent or dishonest conduct, mismanagement of the bankruptcy estate, or if there is a lack of confidence in their ability to effectively administer the bankruptcy proceedings. The court may appoint a trustee to take over the debtor's responsibilities in such cases.
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