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Following a chapter 11 case, lenders face significant risks associated with debtor-in-possession (DIP) loans or cash-collateral orders that provide for automatically perfected liens encumbering a debtor’s assets. Section 364(d)(1) authorizes a debtor to obtain financing secured by a lien on estate property, and bankruptcy courts regularly grant creditors automatically perfected liens on a debtor’s assets without the need to perfect such liens through the applicable state law system.

Suppliers of goods to ocean-going vessels can face considerable counterparty risk, as the vessels that they supply may never return to the same port.

On Jan. 15, 2016, the U.S. Bankruptcy Court for the Middle District of Alabama decided In re Moorer, 15-30422-WRS, 2016 WL 199061 (Bankr. M.D. Ala. Jan. 15, 2016), wherein the court allowed the debtor to bifurcate a loan and treat the value of the property as the secured claim,