Local Rule 4001–2: CASH COLLATERAL

4001–2 CASH COLLATERAL

(a) Motion. Except as provided herein and elsewhere in these Local Rules, in a chapter 11 case, all cash collateral and financing requests under §§ 363 and 364 of the Code shall be by motion filed pursuant to Rules 2002, 4001 and 9014. Stipulations or agreed orders regarding the use of cash collateral or financing requests are subject to the provisions of this Local Rule.

(b) Contents.

(1) Concise Statement. The motion shall include a concise statement meeting the requirements set forth in Rule 4001(b)(1)(B) and Rule 4001(c)(1)(B) (as applicable).

(2) Provisions to be Highlighted. If the proposed relief, form of order and/or stipulation contains any of the following, the motion must (1) recite which of the following is included, (2) identify and highlight the location of any such provision in the proposed order and/or stipulation, (3) state the justification for the inclusion of such provision, and (4) identify any such provision that is proposed to remain in effect if interim approval is granted, but final relief is denied, as provided under Rule 4001(c)(2).

(A) Provisions providing for adequate protection or priority for a claim that arose before the commencement of the case, including:

(i) Cross-collateralization clauses (i.e., clauses that secure the repayment of prepetition debt with postpetition assets in which the secured creditor would not otherwise have a security interest by virtue of its prepetition security agreement or applicable law); or

(ii) Roll-up clauses (i.e., clauses that provide for the use of property of the estate or the proceeds of a postpetition loan to make cash payments on prepetition debt).

(B) Provisions or findings of fact that release, waive, or limit any claim or other cause of action belonging to the estate or the trustee, including but not limited to:

(i) the release, waiver, or limitation of claims or other causes of action against any secured creditor without first giving parties in interest at least 75 days from the entry of the order and the creditors' committee, if appointed, at least 60 days from the date of its appointment to investigate such matters.;

(ii) the release, waiver, or limitation of claims or other causes of action against any secured creditor for alleged prepetition torts or breaches of contract;

(iii) the waiver of avoidance actions under the Code; or

(iv) any modification of the statute of limitations or other deadline to commence an action.

(C) Provisions or findings of fact that determine the validity, enforceability, priority, or amount of a claim that arose before the commencement of the case, or of any lien securing the claim.

(D) Provisions that grant a lien on property of the estate that is not otherwise subject to a lien, grant a junior lien on property of the estate that is subject to a lien, or create a lien senior or equal to any existing lien without the consent of that lienholder.

(E) Provisions that release, waive or limit any right under § 506(c) of the Code.

(F) Provisions that grant a lien on any claim or cause of action arising under §§ 544, 545, 547, 548, 549, 553(b), 723(a), or 724(a) of the Code.

(G) Provisions that provide disparate treatment with regard to professional fee carveouts for the professionals retained by a creditors' committee from that provided for the professionals retained by the debtor.

(H) Provisions that prime administrative expenses of the kind specified in § 503(b) or 507(a) of the Code.

(I) Provisions that waive or modify any entity's authority or right to file a plan or seek an extension of time in which the debtor has the exclusive right to file a plan or otherwise operate to divest the debtor of any discretion in the administration of the estate or limit access to the court to seek any relief under other applicable provisions of law.

(J) Provisions that establish deadlines for filing a plan of reorganization, for approval of a disclosure statement, for a hearing on confirmation, or entry of a confirmation order.

(K) Provisions providing for the indemnification of any entity.

(L) Provisions waiving or modifying provisions of the Code or applicable Rules relating to the automatic stay.

(M) Provisions that waive or modify the applicability of nonbankrutpcy law relating to the perfection of a lien on property of the estate, or on the foreclosure or other enforcement of the lien.

(N) Provisions that waive or modify the debtor's right to move for a court order pursuant to § 363(c)(2)(B) of the Code authorizing the use of cash collateral or § 364362 of the Code to obtain credit.

(O) Provisions that grant a lien in an amount in excess of the dollar amount of cash collateral authorized under the applicable cash collateral order.

(P) Findings of fact on matters extraneous to the approval process.

(Q) Provisions that bar the debtor from future bankruptcy filings.

(3) Checklist. The motion shall be accompanied by a checklist in the format adopted as LBR Form 4001–2 identifying the location and type of each highlighted provision. Compliance with this subsection negates the need to file a separate checklist under Rule 4001.

(4) Documents. The motion shall be accompanied by copies of all documents by which the interest of all entities in the cash collateral was created or perfected, or if any of those documents is unavailable, the reason for the unavailability. The debtor shall use its best effort to obtain and file any documents that are unavailable as soon as possible after the motion is filed and unless otherwise approved by the court, not later than seven (7) business days after the filing of the motion.

(c) Interim Relief at Outset of Case. When a motion is filed with the court on or shortly after the date of the entry of the order for relief, the court may grant interim relief pending review of the proposed debtor-in-possession financing arrangements by the interested parties. Such interim relief is intended to avoid immediate and irreparable harm to the estate pending a final hearing. In the absence of extraordinary circumstances, the court will not approve interim financing orders that include any of the provisions previously identified in (b)(2)(A) through (b)(2)(Q) above.

(d) Immediate Relief During Pendency of Case. If, during the pendency of the case, the debtor asserts an immediate need for the use of cash collateral, the court may schedule a preliminary hearing on the motion after notice has been provided to any entity claiming an interest in the cash collateral. Notice provided pursuant to LBR 9013–3 may be by telephone, facsimile (fax) or email if time does not permit notification by mail.