In re Lexington Hospitality Group, LLC

(Bankr. E.D. Ky. Nov. 1, 2011)

The bankruptcy court grants the debtor’s motion regarding cash collateral use, because the property to be used (hotel revenue and post-petition restaurant revenue) was not subject to a perfected security interest. The court determines that the hotel revenue paid in cash was not subject to the creditor’s mortgage because it was not rent. A hotel customer does not obtain a real property interest in a hotel room, but instead has a license. The cash paid for the room is thus personal property. The creditor was not in possession of the cash or deposit accounts, and thus the lien was not perfected as to that cash. Hotel revenue paid from credit cards constituted an obligation that would be a “payment intangible” under Article 9. The creditor’s financing statement failed to identify payment intangibles as collateral. While it referenced an “all asset” security agreement, that was insufficient to perfect a security interest in payment intangibles. The creditor does not have a lien on post-petition restaurant revenue pursuant to 11 U.S.C. § 552. Opinion below

Judge: Schaaf

Attorneys for Debtor: DelCotto Law Group PLLC, Laura Day DelCotto, Jamie L. Harris, Sara A. Johnston

Attorneys for Creditors: Dinsmore & Shohl LLP, Martin B. Tucker, Sarah S. Mattingly

2017-11-01 – in re lexington hospitality group

Author: Matt Lindblom

 

East Cost Miner, LLC v. Nixon Peabody, LLP

(E.D. Ky. Oct. 3, 2017)

The district court affirms the bankruptcy court’s interpretation of a final cash collateral order, holding the bankruptcy court did not abuse its discretion in finding a carve-out for payment of professional fees included prepetition collateral of the lenders. The text of the order along with a review of the case record made clear that the parties had agreed the prepetition collateral was included. $2.4 million in fees were awarded. Opinion below.

Judge: Wilhoit

Attorneys for Appellants: Luskin, Stern & Eifler LLP, Alex Talesnick, Michael Luskin; Fowler Bell PLLC, Matthew David Ellison, Taft A. McKinstry

Attorneys for Appellees: Nixon Peabody LLP, Christopher M. Desiderio, Dennis J. Drebsky; Amelia Martin Adams, Laura Day DelCotto; Squire Patton Boggs, Eliot M. Smith, Stephen D. Lerner; Foley & Lardner, LLP, David B. Goroff, Edward J. Green, Geoffrey S. Goodman; T. Kent Barber; John L. Daughtery; Rachelle Cathleen Dodson; Phaedra Spradlin

2017-10-03 – in re east coast miner

Author: Matt Lindblom