Local Rule RULE 4001-2: CASH COLLATERAL AND FINANCING MOTIONS AND ORDERS

RULE 4001-2 CASH COLLATERAL AND FINANCING MOTIONS AND ORDERS A. Definition In this Rule, a "financing motion" means a motion to use cash collateral or a motion to approve financing.

B. Contents of Motion A financing motion must describe the principal terms of the proposed use of cash collateral or financing, including the maximum borrowing available on a final basis, the interim borrowing limit, borrowing conditions, interest rate, maturity, events of default, use of funds limitations, and protections under §§ 363 and 364 of the Bankruptcy Code.

C. Provisions to be Highlighted

(1) A financing motion, order, or stipulation must highlight:

(i) Provisions that secure pre-petition debt with post-petition assets in which the secured creditor would not otherwise have a security interest based on its pre-petition security agreement or applicable law.

(ii) Provisions that or findings of fact that bind the estate or parties in interest concerning the validity, perfection, or amount of the secured creditor's pre-petition lien or debt or the waiver of claims against the secured creditor, without first giving parties in interest at least 75 days from the entry of the order, or a creditors' committee at least 60 days from the date of its formation, to investigate.

(iii) Provisions that waive any rights of the estate under § 506(c) of the Bankruptcy Code.

(iv) Provisions that immediately grant to the pre-petition secured creditor liens on the debtor's claims and causes of action under §§ 544, 545, 547, 548, and 549 of the Bankruptcy Code.

(v) Provisions that treat pre-petition secured debt as post-petition debt or use post-petition loans from a pre-petition secured creditor to pay part or all of the secured creditor's pre-petition debt, except as provided in § 552(b) of the Bankruptcy Code.

(vi) Provisions that treat a committee's professionals differently from the debtor's professionals with respect to a professional fee carve-out, and provisions that limit committee counsel's use of the carve-out.

(vii) Provisions that prime any secured lien without the consent of the lien holder.

(viii) Provisions declaring that the order does not impose lender liability on any creditor.

(ix) Provisions that grant the lender relief from the automatic stay in § 362 of the Bankruptcy Code without further order of court.

(x) In jointly administered cases, provisions for joint and several liability on loans.

(2) The motion must provide a summary of each highlighted provision, identify its location, and state the justification for including the provision.

(3) Any provision listed in section (1)(c)(i)-(x) not highlighted may be declared unenforceable.

D. Budget A financing motion must provide a budget for the period when the order is in effect. The budget must state in reasonable detail the amount of projected receipts and disbursements during the period.

E. Interim Orders No interim financing order that includes a provision listed in sections (C)(1)(c)(i)-(x) will be entered except in extraordinary circumstances.

F. Final Orders No final financing order may be entered without notice and a hearing under Rule 4001 of the Federal Rules of Bankruptcy Procedure. If a creditors' committee will be formed, no final hearing under Rule 4001 may be held until at least 7 days after the committee's appointment under § 1102 of the Bankruptcy Code, unless the court orders otherwise.

G. Black-lined Version Required A party who files an amended financing motion, interim financing order, or final financing order (or related amended document) must attach a black-lined version showing all changes to the preceding version.