Opinion ID: 663089
Heading Depth: 2
Heading Rank: 1

Heading: Cash Collateral

Text: 46 The April 10, 1992 order did not provide Carteret with increased protection when it required that the money in the cash collateral account be turned over to Carteret because Carteret was entitled to those monies even without the order. Prior to Swedeland's filing of the Chapter 11 petition, Carteret had a first mortgage on the Crystal Springs property and a lien on the proceeds from the sale of individual residential units. Under the Carteret-Swedeland agreement, Carteret agreed to release its lien on each unit upon the payment by Swedeland of a release price of $42,100 for the unit released. After filing for Chapter 11 protection, Swedeland requested permission to use the cash proceeds from the sale of the units to finance the continued construction of the project. It is these proceeds which we have been terming the cash collateral. Carteret objected to this application, but the bankruptcy court granted the request. 47 The bankruptcy court, however, recognized Carteret's liens and granted Carteret a continuing lien and security interest in and to all future sales proceeds and all other assets as adequate protection for allowing Swedeland to use the cash collateral to continue construction until December 31, 1991. Accordingly, Carteret previously had been granted a lien on these post-petition proceeds. Therefore, inasmuch as the bankruptcy court already had recognized and granted Carteret a continuing lien on the cash proceeds, it erred in considering those same proceeds to be additional protection permitting the section 364(d) authorization.