§1205 — Title 11 Bankruptcy | U.S. Code

Summary

When a case is handled under this chapter, the usual rule elsewhere about "adequate protection" does not apply. If the court finds someone’s interest in property needs protection because the stay, use, sale, lease, or a new lien lowers the property’s value or their ownership, the court can order protection in a few ways. The trustee can make cash payments now or over time. The person can get an extra or replacement lien. For farms, the person can be paid fair local rent based on the land’s rental value and income. The court can also give other relief that protects value, but it cannot simply treat that person as an administrative expense for payment.

Title 11, §1205

Bankruptcy — Source: USLM XML via OLRC

(a)section 361 does not apply in a case under this chapter.

(b)In a case under this chapter, when adequate protection is required under section 362, 363, or 364 of this title of an interest of an entity in property, such adequate protection may be provided by—

(1)requiring the trustee to make a cash payment or periodic cash payments to such entity, to the extent that the stay under section 362 of this title, use, sale, or lease under section 363 of this title, or any grant of a lien under section 364 of this title results in a decrease in the value of property securing a claim or of an entity’s ownership interest in property;

(2)providing to such entity an additional or replacement lien to the extent that such stay, use, sale, lease, or grant results in a decrease in the value of property securing a claim or of an entity’s ownership interest in property;

(3)paying to such entity for the use of farmland the reasonable rent customary in the community where the property is located, based upon the rental value, net income, and earning capacity of the property; or

(4)granting such other relief, other than entitling such entity to compensation allowable under section 503(b)(1) of this title as an administrative expense, as will adequately protect the value of property securing a claim or of such entity’s ownership interest in property.

Notes & Related Subsidiaries

Editorial Notes

Codification For repeal of section effective Oct. 1, 1998, and subsequent reenactment of section, see note set out preceding section 1201 of this title.

Statutory Notes and Related Subsidiaries

Effective Date

sPermanent reenactment of section effective July 1, 2005, see section 1001(a)(2) of Pub. L. 109–8, set out as a Repeal, Reenactment, and Termination of Chapter note under section 1201 of this title. For

Effective Date

s of section and

Amendments

extending periods for which section was reenacted prior to permanent reenactment, see

Effective Date

and

Effective Date

of 1999, 2001, 2002, 2003, and 2004 Amendment notes set out under section 1201 of this title.

§1205 Adequate protection

Summary

Title 11, §1205

Notes & Related Subsidiaries

Editorial Notes

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Amendments

Effective Date

Effective Date

Citations & Metadata