Cash Collateral Motion

---
name: cash-collateral-motion
description: Drafts motions to use cash collateral under 11 U.S.C. § 363. Use when a debtor-in-possession needs court authorization to use cash collateral, typically as a first-day pleading.
tags:
  - drafting
  - litigation
  - motion
---

# Cash Collateral Motion

Drafts a motion for authority to use cash collateral under § 363(c)(2) — a critical first-day pleading in bankruptcy. Covers adequate protection, budget constraints, carve-outs, and interim/final hearing procedures.

## Required Inputs

1. **Case info** — debtor name, case number, chapter, court, judge
2. **Prepetition debt** — secured creditor(s), loan docs, amounts, collateral descriptions
3. **Cash collateral sources** — accounts receivable, bank accounts, inventory proceeds, rents
4. **Budget** — 13-week cash flow projection with line-item detail
5. **Adequate protection proposal** — what debtor offers the secured creditor
6. **Lien records** — UCC filings, mortgages, security agreements, intercreditor agreements
7. **Urgency basis** — why interim relief is needed before final hearing

## Workflow

### 1. Introduction and Relief Requested

- Identify debtor, case, chapter
- State debtor seeks authority under § 363(c)(2) for interim and final relief
- Preview adequate protection package

### 2. Background

- Business operations and necessity of cash collateral
- Prepetition secured debt (nature, amount, lien position, priority)
- Events leading to filing

### 3. Jurisdiction

Cite: 28 U.S.C. §§ 157, 1334 · 11 U.S.C. §§ 363(c)(2), 363(e) · Bankruptcy Rule 4001(b) · applicable local rules.

### 4. Cash Collateral Description

- All cash and cash equivalents traced to secured creditor's collateral
- Bank/deposit accounts, inventory/receivable proceeds, rents and profits (if applicable)

### 5. Necessity

- Debtor cannot operate without cash collateral
- Immediate obligations: payroll, vendors, operations
- Consequences of denial: shutdown, job losses, asset deterioration
- No alternative financing on better terms

### 6. Proposed Budget

- 13-week cash flow projection (attach as exhibit)
- Categories: payroll, rent, utilities, insurance, critical vendors, professional fees
- Variance reporting (typically ±10–15%) and budget modification procedures

### 7. Adequate Protection Package (§ 363(e))

Select from and tailor to facts:

- **Replacement liens** — same priority on post-petition assets of same kind
- **Superpriority claims** — § 507(b) administrative expense
- **Cash payments** — periodic interest or principal
- **Equity cushion** — if collateral value exceeds debt
- **Reporting** — financials, budget variance, books-and-records access
- **Insurance** — maintained on collateral
- **Additional** — milestones, operating covenants, termination events

### 8. Interim and Final Orders

**Interim** (first-day hearing):
- Limited period (2–3 weeks), budget compliance, immediate adequate protection, schedule final hearing

**Final**:
- Extended authorization, full adequate protection, termination events/remedies
- Carve-out for professional fees (debtor's counsel, committee counsel, UST fees)
- Reservation of rights for all parties

### 9. Carve-Out Provisions

- Professional fee carve-out (amount and structure)
- UST quarterly fees, clerk fees, committee professionals
- Triggers that reduce or eliminate carve-out

## Checks

- File as emergency/first-day motion requesting interim relief
- Comply with Rule 4001(b)(1)(B) — highlight all specified provisions in the motion
- Address intercreditor agreement issues and multiple-creditor priority
- Budget must be realistic — inflated projections destroy credibility
- Adequate protection must be substantive, not perfunctory
- Include a supporting declaration from a debtor representative
- Proposed order must be filed as a separate document

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