Cash Collateral Motion
Drafts a motion for authority to use cash collateral under § 363(c)(2) — a critical first-day pleading in bankruptcy. Covers adequate protection, budget constraints, carve-outs, and interim/final hearing procedures.
Required Inputs
- Case info — debtor name, case number, chapter, court, judge
- Prepetition debt — secured creditor(s), loan docs, amounts, collateral descriptions
- Cash collateral sources — accounts receivable, bank accounts, inventory proceeds, rents
- Budget — 13-week cash flow projection with line-item detail
- Adequate protection proposal — what debtor offers the secured creditor
- Lien records — UCC filings, mortgages, security agreements, intercreditor agreements
- Urgency basis — why interim relief is needed before final hearing
Workflow
1. Introduction and Relief Requested
- Identify debtor, case, chapter
- State debtor seeks authority under § 363(c)(2) for interim and final relief
- Preview adequate protection package
2. Background
- Business operations and necessity of cash collateral
- Prepetition secured debt (nature, amount, lien position, priority)
- Events leading to filing
3. Jurisdiction
Cite: 28 U.S.C. §§ 157, 1334 · 11 U.S.C. §§ 363(c)(2), 363(e) · Bankruptcy Rule 4001(b) · applicable local rules.
4. Cash Collateral Description
- All cash and cash equivalents traced to secured creditor's collateral
- Bank/deposit accounts, inventory/receivable proceeds, rents and profits (if applicable)
5. Necessity
- Debtor cannot operate without cash collateral
- Immediate obligations: payroll, vendors, operations
- Consequences of denial: shutdown, job losses, asset deterioration
- No alternative financing on better terms
6. Proposed Budget
- 13-week cash flow projection (attach as exhibit)
- Categories: payroll, rent, utilities, insurance, critical vendors, professional fees
- Variance reporting (typically ±10–15%) and budget modification procedures
7. Adequate Protection Package (§ 363(e))
Select from and tailor to facts:
- Replacement liens — same priority on post-petition assets of same kind
- Superpriority claims — § 507(b) administrative expense
- Cash payments — periodic interest or principal
- Equity cushion — if collateral value exceeds debt
- Reporting — financials, budget variance, books-and-records access
- Insurance — maintained on collateral
- Additional — milestones, operating covenants, termination events
8. Interim and Final Orders
Interim (first-day hearing):
- Limited period (2–3 weeks), budget compliance, immediate adequate protection, schedule final hearing
Final:
- Extended authorization, full adequate protection, termination events/remedies
- Carve-out for professional fees (debtor's counsel, committee counsel, UST fees)
- Reservation of rights for all parties
9. Carve-Out Provisions
- Professional fee carve-out (amount and structure)
- UST quarterly fees, clerk fees, committee professionals
- Triggers that reduce or eliminate carve-out
Checks
- File as emergency/first-day motion requesting interim relief
- Comply with Rule 4001(b)(1)(B) — highlight all specified provisions in the motion
- Address intercreditor agreement issues and multiple-creditor priority
- Budget must be realistic — inflated projections destroy credibility
- Adequate protection must be substantive, not perfunctory
- Include a supporting declaration from a debtor representative
- Proposed order must be filed as a separate document
It looks like I don't have write permissions to the file. Could you grant write access so I can save it, or would you like to copy the content above directly?