What is a “cash collateral motion” in a Chapter 11 bankruptcy?

A cash collateral motion is a court filing in a Chapter 11 bankruptcy in California. It is a request for the court to authorize the use of cash that the debtor is holding. The cash can be in the form of cash, cash equivalents, accounts receivable, inventory, or any other asset that can be converted to cash. The cash collateral motion is important in a Chapter 11 bankruptcy because it helps the debtor access the funds needed to keep the business running and make regular payments to creditors or other parties. Without this motion, the debtor would be unable to access the cash and assets needed to continue operations. The cash collateral motion must be well-documented and provide the court with a clear understanding of why the debtor needs access to the funds and how this access will help the business continue. The motion must also include an agreement between the debtor and creditor that outlines the repayment parameters. Ultimately, the court will approve or deny the motion based on what it feels is in the best interest of the debtor and the creditors. If the motion is approved, it will provide the debtor with access to the funds; however, if it is denied, the debtor may need to find another form of financing to keep the business running.

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What is a “cash collateral motion” in a Chapter 11 bankruptcy?

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