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Question about DIP accounts
I understand it is standard operating procedure for a debtor in chapter 11
to close prepetition accounts and to open dip accounts. Unless there is a
need to keep the current cash management system or some other pertinent
reason, I advise all my clients to do this as it is incorporated in the UST
guidelines.
I also understand that opening the accounts is for the debtor to comply
with 345(b).
My question is, why does the debtor have to close prepetition accounts? Is
it in the code somewhere?
Sincerely,
*Michael Avanesian, Esq. *
Avanesian Law Firm
801 N. Brand Blvd., Suite #1130
Glendale, CA 91203
Tel: 818.276.2477 | Fax: 818.208.4550
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I understand it is standard operating procedure for a debtor in chapter 11 to close prepetition accounts and to open dip accounts. Unless there is a need to keep the current cash management system or some other pertinent reason, I advise all my clients to do this as it is incorporated in the UST guidelines.I also understand that opening the accounts is for the debtor to comply with 345(b).My question is, why does the debtor have to close prepetition accounts? Is it in the code somewhere?Sincerely,Michael Avanesian, Esq.Glendale, CA 91203
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