Bankers Life Ins. Co. v. Alyucan Interstate Corp. (In re Alyucan Interstate Corp.), 12 B.R. 803 (Bankr.D.Utah)
PUBLISHED
Creditor, with a claim wholly secured by chapter 11 debtor's real property, sought relief from stay to foreclose its interest. The debt owed to creditor equaled approximately 93% of the value of the property, and was increasing at the rate of approximately $8,000 per month, in interest. The court found that the property's value was stable, but that creditor's "equity cushion" would dissipate within a year due to the interest. Creditor asserted that these facts left it without the adequate protection that would be provided by an equity cushion. The court, noting that "adequate protection" was not defined in the Code, found it to be dependent on the factual circumstances of each case and, while an equity cushion may be helpful to adequate protection, it does not define it. The facts before the court were that the property was necessary to debtor's reorganization, creditor was a first lien holder, and had ample collateral to cover its debt. Therefore, creditor was adequately protected and was not entitled to relief from stay.