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Extending credit to a Chapter 11 debtor-in-possession. (Selected Topic).

Business Credit

| October 01, 2002 | Sass, Steven D.; Halperin, Alan D. | COPYRIGHT 2002 National Association of Credit Management. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

With a weak economy and mixed signals over whether it is improving, the number of bankruptcies experienced by many companies (creditors) among their customers is increasing, and the need to examine credit decisions closely has become critical. It seems likely that bankruptcies will continue at the high rate for a period of time even if the economy is starting to recover. Recent statistics show that we have been experiencing the first significant increase in business bankruptcies since the early 1990s. Eventually, it is likely that the spike in bankruptcy filings will abate, but at this point, the timing of such bankruptcy trend reversal is unclear. As a result, credit ...

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