Article by Alan P. Solow and Randall L. Klein
I. Introduction
II. The perils of financing without court authorization
III. Prohibited terms in financing order: roll-over and section 506(c) waiver
IV. The use of future cash flows as present adequate protection
V. The limits of section 364(e) protection for good faith lenders
I. INTRODUCTION
Section 364 governs credit obtained by the debtor in possession or trustee. Section 364 contains several clear statutory provisions, such as the requirement for court authorization to obtain credit outside the ordinary course of business (Sections 364(a), (b) and (c)), the provisions of granting administrative status or collateral to secure post-petition credit (Sections 364(b) and (c)), the authorization to "prime" existing lienholders if their interests are otherwise adequately protected (Section 364(d)), and the protection of post-petition liens from reversal or modification on appeal of the financing order (Section 364(e)). The
