Local Rule RULE 4001-2: USE OF CASH COLLATERAL, OBTAINING CREDIT, AND RELATED STIPULATIONS

RULE 4001-2. USE OF CASH COLLATERAL, OBTAINING CREDIT, AND RELATED STIPULATIONS RELATING TO SAME

(a) (a) A motion for use of cash collateral, for authority to obtain credit, or afor approval of a related stipulation relating to same shall be in the forms required by Fed. R. Bankr. P. 4001(b), (c)), and (d), respectively. In addition, the movantmoving party shall set forth the following information in any motion for use of cash collateral, for authority to obtain credit, or a stipulation regarding same:such motion: the total dollar amount of the request for use of funds,; the specific proposed uses to whichof the funds will be put,; the debtor's proposed budget for the use of the funds,; pricing and economic terms, including interest rates and fees, maturity, termination, and default provisions,; disclosure by the debtor as to whether itthe debtor has reason to believe that the budget will be adequate to pay all administrative expenses due and payable during the period covered by the budget,; the amount of debt asserted to be owed to any creditor claiming an interest in the collateral,; the value of the collateral which secures the creditor's asserted interest,; any proposal for providing adequate protection, including any priority or superpriority provisions, including and the effect thereof on existing liens and any carve outscarveouts from liens or superpriorities,; and any choice of law provision. If the debtor seeks authority to use cash collateral or to obtain credit on an emergency or expedited basis, the debtor shall state the nature of the emergency requiring an emergency or expedited determination.

(b) (b) A motion for use of cash collateral, for authority to obtain credit, or for approval of a related stipulation relating to same, as well as any proposed orders for which entry is sought, shall be served on all creditors who assert an interest in the cash collateral and their attorneys, if known, any taxing authority that has a claim against the debtor, the debtor's twenty (20) largest unsecured creditors, the members of any committee appointed in the case and counsel to anyor, if represented, the attorney for the committee, or, if the case is a chapter 9 case or a chapter 11 case and no committee has been appointed under § 1102, on the creditors included on the list filed under Fed. R. Bankr. P. 1007(d), any parties who have filed a request for service of all pleadings and notices, and the United States trustee.

(c) Subject to section (d), the following provisions contained in an agreement between the debtor and the holder of a secured claim as to use of cash collateral, obtaining credit, or adequate protection, or any interim or final order approving or authorizing the use of cash collateral, obtaining credit, or adequate protection, shall be unenforceable:

(1) Cross-collateralization clauses: Provisions that elevate prepetition debt to administrative expense or higher status or secure the repayment of prepetition debt with postpetition assets, other than (iA) a claim arising from postpetition advances which constitute an additional non-replacement extension of credit; or (iiB) a claim representing the diminution in value of the secured claim after the commencement of the case;

(2) Concessions as to the status of prepetition lien or debt: Provisions or findings of fact that bind the debtor, the estate representative, or other parties in interest with respect to the validity, perfection, priority, enforceability, or amount of the secured creditor's prepetition lien or debt;

(3) Provisions creating liens on bankruptcy causes of action: Provisions that grant liens on the estate's claims arising under 11 U.S.C. §§ 506(d), 544, 545, 547(d),, 548, or 549;

(4) Waivers: Provisions that seek a waiver of or restrict in any way rights that the debtor or estate representative may have under sections 11 U.S.C. §§ 506(c),, 544, 545, 547, 548, or 549; or that purport to release, waive, or restrict alleged prepetition claims by the debtor or the estate against the secured creditor; or that in any way restrict the ability of the debtor or the estate representative to file a plan or that prohibit or restrict any proposed treatment of a creditor in that plan;

(5) Right to relief from stay: Provisions that grant automatic relief from stay upon the occurrence of any event; or that purport to bind the Court to an expedited or emergency hearing on a request for such relief; or that limit in any way the Court's consideration of issues that may arise under 11 U.S.C. § 362(d) or the debtor's or estate representative's rights to bring those issues before the Court;

(6) Rollups: Provisions that deem prepetition secured debt to be postpetition debt or that use postpetition loans from a prepetition secured creditor to pay part or all of a secured creditor's prepetition debt;

(7) Nonconsensual priming: Provisions that create a lien senior or equal to any existing lien without the consent of that lienholder;

(8) Disparate carveouts: Provisions that provide fee or expense carveouts for any Professional disparate from those provided to any and all Professionals whose employment is approved by the Court;

(9) Waiver of right to seek use of cash collateral: Provisions that limit the right of the debtor or the estate representative to move for an order authorizing the use of cash collateral or that seek to prime the secured position of any other secured party under 11 U.S.C. § 364(d) in the absence of the secured creditor's consent;

(10) Waiver of procedural requirements for foreclosure: Provisions that waive the procedural requirements for foreclosure required under applicable nonbankruptcy law;

(11) Venue in foreign jurisdiction: Provisions that place venue in a jurisdiction other than this Court in the event of a dispute under any agreement;

(12) Payment of secured creditor's expenses: Provisions that require the debtor to pay a secured creditor's expenses and attorney's fees in connection with a proposed financing or use of cash collateral without any notice or review by the Office of the United States trustee andor the Court;

(13) Termination; Default; Remedies: Provisions that provide that the use of cash collateral will cease or the financing agreement will default, on (iA) the filing of a challenge to lender's prepetition lien or lender's prepetition conduct; (iiB) entry of an order granting relief from automatic stay (except as to material assets); (iiiC) grant of a change of venue with respect to the case or any adversary proceeding; (ivD) the making of a motion by a party in interest seeking any relief (as distinct from an order granting such relief); (vor (E) management changes or the departure, from the debtor, of any identified employees; and

(14) Release of Liability: Provisions that purport to release the prepetition lender's liability for alleged pre petitionprepetition torts, breaches of contract, or lender liability, releases of pre-petitionprepetition defenses and/or counterclaims, and provisions that shorten the period of limitations within which any party in interest (including a successor trustee) may bring causes of action against the lender.

(d) Notwithstanding section (c), the Court may order the enforcement of any terms and conditions on the use of cash collateral or obtaining credit, provided that (i1) the proposed order or agreement specifically states that the proposed terms and conditions vary from the requirements of section (c), and (ii2) any such proposed terms and conditions are conspicuously and specifically set forth in the proposed order or agreement or order.

(e) Preliminary and Final Orders; Notice

(1) A single motion may be filed seeking entry of an interim and final order authorizing use of cash collateral or a borrowingobtaining credit, or approving a related stipulation relating to same. . The motion shall be accompanied by any proposed order for which entry is sought. Notice of the motion and any notice of any hearing shall be served on the United States trustee, as well as those parties required by Fed. R. Bankr. P. 4001(b)(1) and (c)(1)..

(2) The Court may enter an interim preliminary order authorizing use of cash collateral or borrowingobtaining credit, or approving a related stipulation relating to same only to the extent necessary to avoid immediate and irreparable harm to the estate pending a final hearing. Any provision of an interim preliminary order may be reconsidered at the final hearing. Provisions in an interim preliminary order shall not be binding on the Court with respect to the provisions of the final order, except that a lender: (A) will be afforded the benefits and protections of the interim preliminary order for funds advanced during the term of the interim preliminary order, and (B) will not be required to advance funds under a final order which contains provisions contrary to or inconsistent with the interim preliminary order.

(3) A final hearing on a motion authorizing use of cash collateral or a borrowing, or a stipulation relating to same shall not be held earlier than fourteen (14) days after service of the notice of hearing.