Replacement Liens As Adequate Protection

Law360, New York (February 22, 2011, 1:02 PM EST) -- The Sixth Circuit Bankruptcy Appellate Panel (BAP), in In re Buttermilk Town Center LLC, recently considered whether a debtor in a single-asset real estate case can provide adequate protection to a lender for the use of rents as cash collateral when the debtor does not have an equity cushion in the property and where the lender held a prepetition lien on such rents.[1]

Based in part upon an unpublished Sixth Circuit opinion,[2] the BAP held that replacement liens on such rents did not constitute adequate protection....
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