Local Rule RULE 4001-2: CASH COLLATERAL OR OBTAINING CREDIT

RULE 4001-2. CASH COLLATERAL OR OBTAINING CREDIT

(a) A motion or stipulation for use of cash collateral or for authority to obtain credit, must contain:

(i) the total dollar amount of the funds requested,

(ii) the specific uses to which the funds will be put,

(iii) the debtor's proposed budget for the use of the funds,

(iv) the amount of debt asserted to be owed to any creditor claiming an interest in the collateral,

(v) the value of the collateral which secures the creditor's asserted interest, and

(vi) any proposal for providing adequate protection.

(b) If the debtor seeks authority to use cash collateral or to obtain credit on an emergency or expedited basis, the debtor must state the nature of the emergency requiring an expedited hearing and determination. The motion must be accompanied by copies of all documents evidencing perfection by which the interest of any entity claiming an interest in the cash collateral was created or perfected. Upon the request of the debtor, a creditor must promptly deliver copies of such perfection documents to the debtor to facilitate debtor's compliance with this subpart.

(c) Unless otherwise ordered by the Court, a motion or stipulation to use cash collateral or for authority to obtain credit must be served on:

(i) all creditors who assert an interest in the collateral and their attorneys, if known;

(ii) any taxing authority that has a claim against the debtor;

(iii) counsel to any appointed committee, or if none, on the creditors on the list filed pursuant to FRBP 1007(d);

(iv) any parties who have filed a request for service of all pleadings; and

(v) the U.S. Trustee.

(d) Except as set forth in subpart (e), the following provisions contained in an agreement between the debtor and the holder of a secured claim for use of cash collateral, obtaining credit, or adequate protection, or any order approving or authorizing the use of cash collateral, obtaining credit, or granting adequate protection, will be unenforceable on either an interim or final basis:

(i) any acknowledgment of the validity, amount, perfection, priority, extent or enforceability of the secured claim, if the agreement or order purports to bind any party other than the debtor;

(ii) any releases of liability for the creditor's alleged prepetition torts or breaches of contract, waiver of avoidance actions or waiver of defenses by the debtor or estate representative;

(iii) any postpetition lien which purports to secure any claim of a secured creditor other than:

(1) a claim arising from postpetition advances which constitute an additional nonreplacement extension of credit; or

(2) a claim representing the diminution in value of the secured claim after the commencement of the case;

(iv) any grant of a security interest in avoidance power recoveries available to a trustee; or

(v) any provision granting a creditor relief from the automatic stay without further order or hearing upon the breach of the cash collateral, adequate protection or postpetition financing order or agreement.

(e) Notwithstanding subpart (d), the Court may order the enforcement of any terms and conditions on the use of cash collateral, obtaining credit or granting adequate protection on a final basis, provided that:

(i) the proposed order or agreement specifically states that the proposed terms and conditions vary from the above requirements, and

(ii) any such proposed terms and conditions are conspicuously and specifically set forth in the proposed agreement or order.