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

A cash collateral motion in a Chapter 11 bankruptcy is a motion filed by a debtor to gain access to funds or assets already pledged as collateral on any debts that are part of the bankruptcy filing. These motions are generally used when the debtor needs access to funds in order to continue operations or to pay their creditors. A cash collateral motion must be approved by the court before the debtor can access the pledged funds or assets. The cash collateral motion must include a rationale for why the debtor needs access to the funds, a detailed explanation of the collateral that has been pledged, information about the use of the funds, an accounting of the financial status of the debtor, and a plan for how the funds will be used. A court must approve the motion before the debtor can access the cash collateral. The cash collateral motion is an important tool in Chapter 11 bankruptcy proceedings as it provides the debtor with access to necessary funds. Without a cash collateral motion, the debtor is unable to continue operations or pay their creditors. It is an important step in the bankruptcy process, and the court must thoroughly review the motion and make sure that it is in the best interests of the debtor, creditors, and the bankruptcy process as a whole.

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