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 with the bankruptcy court asking for permission to use certain assets as collateral, such as money deposits held by banks. The motion requests that the court allow the debtor to use the asset (cash) as collateral for a loan or other financing, or to pay for ongoing business operations. The motion is usually filed along with other supporting documents that explain the debtor’s current financial situation and the purpose of the collateral. The court may grant the debtor’s request if it finds that the debtor is using the cash collateral in a reasonable and necessary way to keep the debtor’s business running. The court may also require the debtor to provide additional security if it finds that the collateral is not sufficient to secure the debt. A cash collateral motion may also be filed to obtain relief from creditors, such as a stay of collection efforts. The court may also impose conditions on any cash collateral motion, such as requiring the debtor to keep detailed records of how the cash collateral is being used. The motion may also be subject to review by the creditors and the court may require the debtor to give an account of how the funds are being used. A court may also require the debtor to provide additional security to protect the creditors’ interests.

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

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