We had a customer called who filed bankruptcy. He is saying that we need to open some sort of court restricted account for him. We are figuring he must mean a debtor-in-possession account.

So, I'm looking for information on debtor-in-possession accounts (bankruptcy depositors). I have found out so far that #1, we are an approved depository, #2 that we are in the Northern/Eastern Bankruptcy district, and #3, that the account has to be titled, Joe Smith, Debtor in Possession.

What I do not know is:
1. Who opens the account and who signs on the account - the trustee or the debtor?
2. What else do I need to know? Are we allowed to let money flow in and out of the account or are there some sort of limitations? Reporting requirements?

Thank you in advance for your willingness to educate me.

The customer is in a Chapter 11 Bk so he/it will be "reorganizing." He, not a trustee, stays in possession of the assets and he can open the account as he suggested. I am not aware of any restrictions on the account and you do not have to do any reporting.

Be sure you consult Bk counsel if the customer wants any debtor-in-possession financing!