Assignment Rents

ASSIGNMENT OF RENTS

In re Scottsdale Medical Pavilion. 52 F.3d 244 (9th Cir.1995), aff’d. 159 B.R. 295 (9th Cir.

B.A.P. 1993)

(Az. law) because creditor properly perfected security interest in rents, prepetition rents

constituted cash collateral

In re Days California Riverside Ltd. Partnership, 27 F.3d 374 (9th Cir.1994)

Postpetition hotel revenues, encumbered by a prepetition trust deed and security interest

are ‘proceeds, product, offspring, rents or profits’ under §552(b). A major premise of hotel

financing is the stream of revenues. Hotel room charges are held to be ‘rents’ for security

purposes and thus subject to the lender’s prepetition lien. However, the net revenues, after

allocation of expenses, derived form food and beverage service are not ‘rents.’ See also In re San

Francisco Drake Hotel Assocs., 131 B.R. 156 (Bankr. N.D. Cal. 1991), aff’d, 147 B.R. 538 (N.D.

Cal. 1992).