Glossary

A Debtor-In-Possession (DIP) is an individual or corporation that has filed for a Chapter 11 bankruptcy case, while still maintaining the power to operate the business and have control over the property that a creditor has a lien against.

Failure to fulfill an obligation that was laid out in the credit agreement.  A default may result in penalties being applied or the loan being called.

A formal letter sent by Creditors to inform the Borrower of a default before taking supplemental action.

Demurrage refers to the charges that the charterer pays to the ship owner for its delayed operations of loading/unloading. Officially, demurrage is a form of liquidated damages for breaching the laytime as a it is stated in the governing contract (the charter party). 

A Deposit Account is a savings account, current account, or any other type of bank account that allows money to be deposited and withdrawn by the account holder.

An agreement between the borrower, secured party, and bank which enables the secured party to have a security interest in the deposit account. You will most often see these agreements when a borrower is transitioning from one lender/bank to another.

Depreciation is a reduction in the value of an asset with the passage of time, due in particular to wear and tear. In terms of accounting, Depreciation is a method of allocating the cost of a tangible asset over its useful life.

The Desktop Appraisal is a valuation performed without a physical inspection of the property or assets. The methods for valuation remain the same, however there are no on-site visits. Desktop appraisals will be more cost effective than a standard appraisal.