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Opinion 151

Case Name: 

In re Lettuce Entertain You, Inc.

Judge: 
Judge Clark
Date: 
Mar-26-1985
Case Number(s): 
83C-3014
Status: 

UNPUBLISHED
See 123.pdf

Body: 

Creditor, the lessor of commercial mall space to chapter 11 debtor, filed a prepetition state court action against debtor seeking unpaid rent and recovery of the leased property. Over a period of more than a year, debtor made a number of payments to the clerk of the state court, in order to retain possession of the property during the lawsuit. When debtor filed its petition in bankruptcy, the amount being held by the state court was approximately $33,000, which was significantly less than the amount creditor was entitled to under the lease. The court considered the parties' conflicting claims to those funds, which it determined to be "cash collateral" under 11 U.S.C. § 363(a), and ruled both that creditor had established its interest in the funds, in satisfaction of § 363(o)(1), and that debtor had not satisfied its burden to provide creditor with adequate protection under § 363(o)(2). Therefore, the court vacated its previous order granting turnover of the funds to debtor, and granted creditor's motion to prohibit debtor's use of the funds.

Internal Ref: 
Opinion 151
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