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What is cash collateral?

Cash collateral is cash, anything equivalent to cash (e.g., deposit accounts and negotiable instruments) and ownership interests (e.g., securities and documents of title) that are owned or controlled by both the debtor and another party. Cash collateral also includes amounts stemming from property rental (e.g., rent, lodging fees). Cash collateral may not be commingled with the debtor’s other assets and may be spent only with the court’s permission. Secured creditors sometimes request that the court deny said permission.

Barry Rosenzweig
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Barry Rosenzweig, has 25 years experience as an attorney helping clients solve their legal problems.