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Answer:-
The debtor is allowed to borrow funds for short term liquidity after it files bankruptcy under chapter 11. In chapter 11 of filing bankruptcy the debtor-in-possession financing, or the money a lender provides to a company is usually used by a company to fund its operations while it goes through the bankruptcy process.
The lender of bankruptcy financing will be repaid before many other creditors, like previous lenders, employees, or suppliers.
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5. Understanding reorganization in bankruptcy Chapter 11 of the Bankruptcy Act has several features that can...
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