The first forty-eight hours of a Chapter 11 case establish the terms on which everything that follows is negotiated. The motions heard in that window determine whether the business keeps operating, who finances it, and how much control the debtor retains. Reading a first day record is the single most efficient way to understand a case.
The automatic stay
Filing triggers Section 362's automatic stay instantly and without a court order. Collection efforts stop, litigation is halted, foreclosures cease, setoffs are barred, and lien enforcement is suspended. The stay is the reason companies file: it converts a chaotic race among creditors into an orderly process, and it gives the debtor room to negotiate.
It is not absolute. Secured creditors may seek relief from the stay for cause or where the debtor lacks equity in property that is not necessary to reorganisation, and certain proceedings — criminal actions, some regulatory enforcement — are excepted. But for practical purposes, on the petition date the pressure stops.
The first day declaration
A senior officer files a sworn declaration setting out the business, its capital structure, the causes of distress, the pre-petition restructuring efforts attempted, and the relief the debtor seeks on day one. It is written to persuade a judge who knows nothing about the company, which makes it the most useful single document in the case.
Read it first, always. It gives you the debtor's own account of why the company failed, an organised description of the capital structure, and a preview of the strategy — whether the case is heading toward a plan, a 363 sale, or a wind-down. Everything else on the docket makes more sense afterwards.
What gets filed on day one
The standard package: cash management (permitting the existing bank account structure to continue); employee wages and benefits (paying pre-petition compensation, which the Code permits up to statutory caps); critical vendors (paying pre-petition claims of suppliers whose continued performance is essential); utilities (providing adequate assurance under Section 366); insurance; taxes; cash collateral or DIP financing; and the retention of professionals.
Each of these is a request to depart from the ordinary rule that pre-petition claims are not paid during the case. Courts grant them because the alternative — suppliers stopping delivery, employees leaving, utilities disconnecting — destroys value that would otherwise be available to all creditors. The critical vendor motion is the most contested, because it pays some unsecured creditors in full while others wait.
Interim and final orders
Most first day relief is granted on an interim basis at the initial hearing, with a final hearing set for two to four weeks later. This gives parties who were not present — the UCC, which has not yet been appointed — an opportunity to object before the relief becomes permanent.
The interim-to-final window is where the substantive negotiation over DIP terms occurs. A DIP approved on an interim basis with aggressive milestones and a large roll-up frequently emerges from the final hearing materially modified, because the UCC has by then organised and objected. Watching that specific negotiation tells you how much leverage each side actually has.