If, in the course of a bankruptcy, a creditor, such as a bank or supplier, is entitled to the assets of a business, any money recovered or generated by the sale of assets is considered a cash guarantee. Money from receivables, the sale of the balance or the sale of real estate is stored in the cash guarantee account. As a result of the bankruptcy application, the two debtors, whose cases have not been consolidated, filed motions to ask the judiciary to use HomeStreet`s cash security for the purpose of maintaining the property (in the case of RC) and continuing the activity. In the budget attached to the applications, Claar proposed to make seven monthly payments to RC in 2020 for a total amount of approximately $163,000 for grapes delivered to La Prépetition Claar. This amount represented about half of the rights guaranteed by RC. The RC representative testified that RC could not work without the payments. The Bankruptcy Court quashed HomeStreet`s objections to the debtors` proposed use of cash security. When an agent or DIP proposes to use real estate in the form of a „cash guarantee,“ specific rules apply. In Section 363 (a) of the Bankruptcy Code, „cash security“ is defined as „cash, tradable instruments, property documents, securities, deposit accounts or other cash equivalents when acquired, in which the estate and an entity other than the estate are involved.“ Cash security also includes „products, products, descendants, rents or property profits . .
. An interest in security. In Section 101 (51) of the Bankruptcy Code, „security interests“ are defined as „a pawning right created by an agreement.“ According to the Bankruptcy Court, the authorization to use HomeStreet`s cash security to pay for a portion of RC Jevic`s incident claims did not insult because „the payments are „intermediate distributions in the meaning of the term in Jevic“ and because the distributions „advance significant bankruptcy objectives without causing property damage (or perhaps any) creditor.“ In this context, and by intensifying the review of the transaction due to RC`s insider status, the bankruptcy court authorized the use of HomeStreet`s cash security to make payments to RC.