Cash Collateral Post Petition Financing

CASH COLLATERAL & POST-PETITION FINANCING §364

In re Harbin, 486 F.3d 510, 514 (9th Cir. 2007)

“…[W]e conclude that under limited circumstances, a bankruptcy court may exercise its

equitable powers to grant retroactive approval of a post-petition financing transaction pursuant to

11 U.S.C. §364(c)(2).

In re Cooper Commons, LLC, 430 F.3d 1215 (9th Cir. 2005), cert denied, 546 U.S. 1174 , 126

S.Ct. 1340 ( 2006)

A post petition lender could agree to reimburse the chapter 11 trustee’s fees and expenses

without also agreeing to pay for the debtor’s attorneys under §507(a)(1). Further, the debtor’s

attorneys had no standing to challenge the financing under §364(e), since they did not obtain a

stay of the order pending appeal.

In re ProAlert LLC, 314 B.R. 436 (9th Cir. B.A.P. 2004)

Debtor could use cash collateral to pay administrative expenses under § 363 without

having to prove entitlement to surcharge the secured creditor’s collateral under § 506(c).

In re Stanton, 248 B.R. 823 (9th Cir. B.A.P. 2000), aff’d, 285 F.3d 888 (9th Cir. 2002), as

amended, 303 F.3d 939 (9th Cir. 2002)

Debtors were guarantors on a factoring arrangement for their business. As additional

security for payment, they pledged their house as security. The debtors subsequently filed a

chapter 7 case. They continued their business’s factoring arrangement, and incurred additional

indebtedness that was not covered by the business’s assets. The chapter 7 trustee sold their house,

but the factor asserted its security interest in the proceeds in the amount of over $244,000 for

postpetition indebtedness incurred by the nondebtor business.

Held: The factor’s lien on the house was not avoidable under § 549, and the debtors were not

required to seek court approval as to the postpetition encumbrances on their house under § 364.

In re Hotel Sierra Vista Limited Partnership, 112 F.3d 429 (9th Cir. 1997)

Proof of extent of secured creditor’s interest in post-petition room revenues of debtor hotel

requires pro rata allocation of hotel’s operating expenses

Case remanded to determine amount of claim under Days California, 27 F.3d 374 (9th

Cir. 1997)

Scottsdale Medical Pavilion v. Mutual Benefit Life Inc. Co. (In re Scottsdale Medical Pavilion),

52 F.3d 244 (9th Cir. 1995), aff’g, 159 B.R. 295 (9th Cir. B.A.P. 1993).

Secured creditor had an immediately perfected security interest in rents upon the petition

date from prepetition collection of rents, which constituted cash collateral under §365(a) and was

thus entitled to adequate protection.

In re Sunnymead Shopping Center Company, 178 B.R. 809 (9th Cir. B.A.P. 1995)

Secured creditor’s acceptance of adequate protection payments from cash collateral

securing real estate not violation of CA one-action rule

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In re Defender Drug Stores, Inc., 145 B.R. 312 (9th Cir. B.A.P. 1992)

Bankruptcy court has discretion to allow enhancement fee to lender as a part of

postpetition financing

In re Sun Runner Marine, Inc., 116 B.R. 712 (9th Cir. B.A.P. 1990), vacated in part, aff’d in part,

945 F.2d 1089 (9th Cir. 1991)

364(e) – debtor not permitted to assume liability arising from unsecured nonexecutory

contract

In re Ames Dept Stores, Inc., 115 B.R. 34, 37 (S.D.N.Y. 1990)

In re Tenny Village Co., Inc., 104 B.R. 562, (D.N.H. 1989)

Freightliner Market Dev. Corp. v. Silver Wheel Freightlines, Inc., 823 F.2d 362 (9th Cir. 1987)

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