Local Rule 4001-3: Motions to Use Cash Collateral and to Obtain Credit

L.R. 4001-3 – Motions to Use Cash Collateral and to Obtain Credit. A. Provisions to be Disclosed. In addition to the provisions listed in Rules 4001(b)(1)(B) and (c)(1)(B) of the Federal Rules of Bankruptcy Procedure, any motion to use cash collateral or motion to obtain credit (collectively "Financing Motions") must also disclose the following:

1. Cross-Collateralization of Pre-Petition Debt: Provisions that grant cross-collateralization protection (other than replacement liens or other adequate protection) to the pre-petition secured creditor, i.e., clauses that secure pre-petition debt by post-petition assets in which the secured creditor does not assert a valid, perfected security interest by virtue of its pre-petition security agreement or applicable non-bankruptcy law, and provisions that deem pre-petition secured debt to be post-petition debt or that use post-petition loans from a pre-petition secured lender to pay all or part of that lender's pre-petition claim, other than as provided in Section 552(b) of the Bankruptcy Code;

2. Professional Fee Provisions: Provisions that grant a carve-out for professional fees, including the amount of the fee;

3. Priming of Existing Liens: Provisions that prime any secured lien;

4. Loan Documentation Costs: Provisions that call for the payment of fees or costs by the debtor other than reasonable attorney's fees for loan documentation;

5. Plan Restrictions: Provisions that limit, restrict, or otherwise affect the terms of a proposed plan of reorganization; and 6. United States Trustee's Fees: Payment of fees to the United States Trustee.

7. Administrative Claims: Existence of any administrative claim that is sought by the movant.

B. Summary of Essential Terms. All Financing Motions must also set forth, unless good cause is shown, the total dollar amount requested, the debtor's proposed budget for the use of the funds, an estimate of the value of the collateral which secures the creditor's asserted interest, the maximum borrowing available on an interim and final basis, the borrowing conditions, interest rate, fees, costs or other expenses to be borne by the debtor, maturity, limitations on the use of the funds, events of default and the protections afforded under Sections 363 and 364 of the Bankruptcy Code.

C. Interim Relief. The Court may grant relief on an interim and emergency basis to avoid immediate and irreparable harm to the estate pending a final hearing, provided that:

1. The party seeking interim and emergency relief files a motion which complies in all respects with this Rule and with Rule 9006-3 of these Rules, and which describes the reason(s) relief on an emergency basis is necessary and appropriate;

2. Counsel for the party seeking interim, emergency relief contacts the Judge's courtroom deputy to obtain a date and time for a hearing;

3. The motion and notice of hearing on the motion is served on all secured creditors, the United States Trustee, all parties who filed requests for notice, any examiner or Trustee appointed in the case, counsel for any official committee(s), and, if no committee of unsecured creditors has been appointed, all creditors identified on the list of creditors filed pursuant to Rule 1007(d) of the Federal Rules of Bankruptcy Procedure;

4. The party seeking interim and emergency relief shall serve a copy of a proposed order granting the motion on all parties identified in the foregoing subsection.

5. Service of the motion and notice of hearing is made by one or more of the following means: (1) electronic mail, (2) facsimile transmission, or (3) overnight delivery;

6. The party seeking interim and emergency relief files a certificate of service which identifies the persons served with a copy of the motion and notice, and which, for each such person, specifies the method of service.

D. Proposed Order. A proposed order granting the motion must be submitted to the Court as a separate document in accordance with the Court's Electronic Filing Rules, which can be found on the Court's website at www.ilsb.uscourts.gov.