Draft Dip Financing Motion

Skill: Draft DIP Financing Motion

1. Subject-matter triage

• Draft the operative motion first; do not treat supporting narrative as a substitute for the requested filing.
• Treat the motion as a first-day financing request under the Bankruptcy Code, and tailor it to the case posture, liquidity needs, and lender objections shown in the source materials.
• Identify whether the requested relief includes new money, priming liens, roll-up treatment, cash-collateral use, milestones, or exclusivity-related deadlines; each changes the court’s approval analysis.

2. Failure modes the skill is correcting

• The motion asserts a needed facility size without tying it to the near-term cash forecast, shortfall period, and practical alternatives available at filing.
• The motion omits the full capital structure, including all funded debt, insider debt, liens, guarantees, and other priority claims that affect the requested relief.
• The motion buries the most controversial terms instead of disclosing them plainly and justifying them term by term.
• The motion fails to address the temporal relationship among committee formation, challenge rights, and the proposed financing protections.
• The motion does not explain why the requested priming, roll-up, carve-out, or milestone package is necessary and reasonable in light of the estate’s condition.
• The motion states legal conclusions without anchoring them to the governing Bankruptcy Code provisions and standard DIP-financing findings.
• The motion under-explains the impact on existing secured lenders and the form of adequate protection supporting the requested relief.

3. Legal frameworks / domain conventions that apply

• Frame the request under 11 U.S.C. §§ 364(c) and 364(d), and separate the forms of authority sought: superpriority, lien priming, lien on unencumbered assets, and other debtor-in-possession credit protections.
• When the request affects prepetition collateral use, address adequate protection under the Bankruptcy Code and explain the factual basis for the proposed protections.
• If the facility includes a roll-up or debt elevation feature, explain it as a restructuring of prepetition exposure inside the postpetition package, and justify why the court should approve that structure.
• If the order affects investigation rights, explain the proposed challenge period in relation to committee formation, not just the petition date, and tie the start date to case procedure.
• If milestones constrain the case timeline, connect each milestone to a concrete financing, cash, operational, or sale-process need rather than presenting it as a lender preference.
• If the order includes a carve-out, explain who it protects, what it covers, when it applies, and how it interacts with other administrative expense and fee protections.
• If the order affects plan filing or solicitation timing, describe the procedural effect in plain bankruptcy terms and avoid euphemistic drafting.
• Cite controlling bankruptcy authority for each legal proposition invoked, and do not rely on conclusory statements unsupported by statutory or case-law grounding.

4. Analytical scaffolds

• Start with a background section that covers the debtor’s business, the distress catalyst, the operational footprint, and the prepetition financing and collateral picture.
• Then set out the capital structure in full, including each debt layer and any insider or affiliate obligations that inform lender leverage and court scrutiny.
• Next explain the need for immediate financing by connecting the budget, the liquidity runway, and the absence or inadequacy of realistic alternatives.
• When multiple tranches, liens, facilities, or borrower groups are involved, enumerate them before analysis and address each distinctly rather than collapsing them into a generic facility description.
• For the DIP terms, disclose the facility amount, the new-money component, any roll-up, interest, fees, maturity, covenants, milestones, carve-out, variance testing, and any springing or termination events.
• For every contentious term, add a short justification and a preemptive response to the likely objection the court or an affected creditor will raise.
• Justify the requested facility size against the demonstrated short-term liquidity need; if the requested amount exceeds the immediate forecast need, explain the strategic reserve or implementation buffer.
• Address priming-lien adequacy by tying the collateral package, enterprise value context, and proposed protections together, not by reciting boilerplate.
• Address challenge rights and committee timing expressly; if the committee is not yet appointed, say how that affects the challenge window and why the proposed approach is fair.
• Use the source documents to ground factual assertions, and use generally recognized bankruptcy authority for legal propositions when the source materials do not specify the citation.

5. Vertical / structural / temporal relationships

• Make the sequencing of relief clear: petition date, interim hearing, committee formation, challenge-period commencement, final hearing, milestone dates, and maturity or exit deadlines should read as a coherent timeline.
• Distinguish between relief that operates immediately on an interim basis and relief that should be preserved for final order entry.
• Show how each milestone depends on prior events or approvals, especially where financing control, plan timing, sale timing, or restructuring negotiations are tied to lender consent.
• Tie adequate protection, use of collateral, and priming relief to the debtor’s postpetition operating needs and the creditor’s changing position over time.
• If the order creates escalating consequences for missing milestones, explain the business reason for the cadence and the practical effect of each deadline.

6. Output structure conventions

• Draft a comprehensive motion in conventional bankruptcy form: caption, introduction, relief requested, background, capital structure, financing need, summary of terms, legal standards, argument, requested interim relief, requested final relief, and conclusion.
• Use separate paragraphs for each major term or contested provision so the court can see the request, the justification, and the anticipated objection-response in one place.
• Include a clear request for interim and final authority, and distinguish the findings sought for each stage.
• Use plain bankruptcy terminology consistent with first-day motion practice; avoid internal shorthand that obscures the requested relief.
• If the draft is for a filing to be converted into dip-financing-motion.docx, ensure the substantive motion content is complete and ready for export before any ancillary summary.
• Before finishing, verify that the motion file itself is the primary deliverable and contains operative drafting, not a synopsis or outline.