Local Rule 4001-4: MOTIONS AND AGREEMENTS RELATING TO RELIEF FROM THE AUTOMATIC STAY, PROHIBITING OR CONDITIONING THE USE, SALE OR LEASE OF PROPERTY, PROVIDING ADEQUATE PROTECTION, USE OF CASH COLLATERAL, AND OBTAINING CREDIT

LOCAL RULE 4001-4: MOTIONS AND AGREEMENTS RELATING TO RELIEF FROM THE AUTOMATIC STAY, PROHIBITING OR CONDITIONING THE USE, SALE OR LEASE OF PROPERTY, PROVIDING ADEQUATE PROTECTION, USE OF CASH COLLATERAL, AND OBTAINING CREDIT a. Form of Motion. A motion for the approval of an agreement pursuant to Fed. R. Bankr. P. 4001(d) shall be in substantial conformance with the Court's local form.

b. Procedure Upon Default. In the event a party seeks relief upon default under an order, settlement, or agreement covered by Fed. R. Bankr. P. 4001(d), the attorney for that party shall file with the Court a certification of noncompliance, affidavit or declaration consistent with 28 U.S.C. § 1746 attesting to default which specifies the grounds and a proposed order granting the relief sought. The requested relief, including any modification of the stay, is effective only upon entry of the order by the Court.

c. Contents of Motions and Proposed Consent Orders for Use of Cash Collateral or to Obtain Credit. The following provisions enumerated below, to the extent applicable, are added to the enumerated lists of material provisions set forth in Fed. R. Bankr. P. 4001(b)(1)(B), (c)(1)(B), and (d)(1)(B) for all motions, proposed consent orders, or applications seeking approval for the use of cash collateral or to obtain credit. These provisions must be prominently highlighted and easily identified in the motion, proposed consent order or application, and counsel shall call the Court's attention to such provisions on the record at any hearing where such an order or stipulation is presented:

1. the amount of cash collateral the party seeks permission to use or the amount of credit the party seeks to obtain, including any committed amount or the existence of a borrowing base formula and the estimated availability under such formula;

2. material conditions to closing and borrowing, including budget provisions;

3. pricing and economic terms, including letter of credit fees, commitment fees, any other fees, and the treatment of costs and expenses of the lender(s), any agent for the lender(s), and their respective professionals;

4. any findings of fact on matters extraneous to the approval process and/or any provisions or findings of fact that bind (a) the estate or parties in interest with respect to the validity, perfection, or amount of the secured party's lien or debt; or (b) the estate or parties in interest with respect to the relative priorities of the secured party's lien and liens held by persons who are not parties to the stipulation;

5. any carve-outs from liens or superpriority provisions, including the material terms of any professional fee carve-out;

6. any cross-collateralization provision or other provision that elevates prepetition debt to administrative expense (or higher) status or that secures prepetition debt with liens on postpetition assets (which liens the creditor would not otherwise have by virtue of the prepetition security agreement or applicable law);

7. any rollup provision that applies the proceeds of postpetition financing to pay, in whole or in part, prepetition debt or which otherwise has the effect of converting prepetition debt to postpetition debt;

8. any provision that establishes sale or plan milestones;

9. any provision that would limit the Court's power or discretion to enter future orders in the case, or would interfere with the exercise of the fiduciary duties, or restrict the rights and powers, of the trustee, debtor in possession, or a committee appointed under sections 1102 or 1114 of the Bankruptcy Code, or any other fiduciary of the estate, in connection with the operation, administration, financing, use or sale of the business or property of the estate, or formation of a plan;

10. any limitation on the lender's obligation to fund certain activities of the trustee, the debtor in possession or a committee appointed under sections 1102 or 1114 of the Bankruptcy Code;

11. termination or default provisions that entitle relief from the automatic stay or withdrawal of consent to use of cash collateral upon default without further order of the Court or without notice to the debtor in possession, any committee appointed in the case, or the United States Trustee of at least five (5) business days;

12. any change-of-control provisions;

13. any prepayment penalty or other provision that affects the debtor's right or ability to repay the financing in full during the course of the chapter 11 reorganization case;

14. in jointly administered cases, terms that govern the joint liability of the debtors including any provisions that would govern the nature and/or priority, if any, of any interdebtor claims that would result if a debtor were to repay debt incurred by or for the benefit of another debtor;

15. any provision for the funding of non-debtor affiliates with cash collateral or proceeds of the loan, as applicable, and the approximate amount of such funding;

16. any provisions that require the debtor to pay an agent's or lender's expenses and attorney's fees in connection with the proposed financing or use of cash collateral, without any notice or review by the Office of the United States trustee, the committee appointed under section 1102 of the Bankruptcy Code (if formed) or, upon objection by either of the foregoing parties, the Court;

17. defined terms must either be defined in the motion or the motion shall include a specific reference to where the terms are defined in the applicable loan agreements;

18. any provision for the reaffirmation of the prepetition loan agreement or the covenants of such agreement.

19. any provision that prohibits the use of estate funds to investigate the liens and claims of the prepetition lender;

20. waivers of 11 U.S.C. § 506(c);

21. releases of liability for the creditor's alleged pre-petition torts or breaches of contract;

22. waivers, assignments, transfers, or encumbrances of causes of action pursuant to sections 544, 545, 547, and/or 548 of the Bankruptcy Code, or any other claims for relief arising under the Bankruptcy Code, or, in each case, the proceeds thereof; and 23. waivers of the procedural requirements for foreclosure mandated under applicable non-bankruptcy law.

Notes:

(2023) The rule was restyled and paragraph (c) was substantially amended to replace provisions that normally are and are not approved with provisions that must be prominently highlighted in motions and consent orders for use of cash collateral or to obtain credit.