ATP Oil & Gas Corp fka ATPAQ

[56Chevy]

what confuses me if the dip lenders bid up to there allowed amount

are the 2nd liens allowed to over bid them and if they did how would they since the dip lenders can only be gotten rid of with cash. and the 2nd liens would be doing a credit bid

I think you answered your own question - CASH is King but credit bids are cashless. The DIP lenders will credit bid the entire amount they are owed...and they'll do that to insure no bid wins below that amount. They will be the staulking horse bidder. Any other bids, including the AD Hoc 2nd lien holders, would have to be cash bids. The DIP lender has super priority and must be paid first.

or can the dip lenders accept credit/piece of company? instead of cash

They have several options but owning and running an oil company isn't something they want to do. They have chosen an all cash recovery...hence the 363 sale. (That's IF the Judge approves of it all first).