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In re Strick Chex Columbus Two, LLC, BK 15-11276, Doc #82

The Court granted the secured creditor's motion for adequate protection.  The creditor held a pre-petition blanket lien on all of the debtor's property, and claimed all of the debtor-restaurant's revenue as cash collateral.  The Court held that because a restaurant is service based, a portion of its revenue is received in return for the services provided, a portion of the revenue is received as payment for the food itself (the inventory), and it is only that portion received in exchange for the inventory that constitutes proceeds of that inventory (and thus cash collateral).  Consequently, the Court granted the creditor adequate protection in the form of a replacement lien only on the debtor's post-petition inventory.

Date: 
11/19/2015