Cash Collateral Usage Not Conditioned on Benefit to Secured Creditor

The Bankruptcy Code incorporates various special rights and protections for holders of secured claims as a kind of quid pro quo for suspending a secured creditor’s ability to enforce its remedies so long as the automatic stay is in force during a bankruptcy case. Among these safeguards is the debtor’s obligation to provide "adequate protection" of a secured creditor’s interest in collateral, a concept designed to ensure that a secured creditor’s interest does not diminish in value as a consequence of the stay, the debtor’s use, sale or lease of the collateral or the grant of any additional liens on the property. Another secured creditor-friendly provision in the statute limits the estate’s ability to "surcharge" a secured creditor’s collateral for costs incurred in preserving or disposing of an encumbered asset to situations where a clear "benefit" is conferred on the secured creditor, as opposed to the estate.