Bankruptcy Financing

A company is filing a chapter 11 bankruptcy. They are looking to stay in business, and need funds to cover their operating expenses during the reorganization process. If you're a lender, this makes them about as risky a customer as you can get. It also makes them very profitable if an incremental loans works out...as you will justify charging exorbitant interest rates.

While it goes by a few names (including "debtor in possession financing" or "turnaround financing"), it means big risks and potentially big rewards for the lenders willing to engage in it. In unsophisticated terms, it's basically payday lending for businesses.