When negotiating forbearance agreements with borrowers, lenders should consider including a pre-petition waiver of the debtor’s right to oppose a motion for relief from the automatic stay. In a recent decision, the Northern District of Georgia Bankruptcy Court found that a pre-petition waiver of the right to oppose a motion for stay relief was enforceable. A closer examination of this opinion provides guidance to lenders and secured creditors in negotiating these provisions with borrowers.

In a new, unpublished decision¹ in the U.S. Court of Appeals, the Fourth Circuit affirmed a bankruptcy court’s order re-characterizing a portion of a loan to a bankruptcy debtor purchased by a creditor as equity instead of debt, impairing that creditor’s ability to recover from the debtor.

Much to the chagrin of golf course lenders, bankruptcy and appellate courts around the country have consistently held that a properly-perfected mortgage or security interest in golf course revenues, including cart rentals and green fees, is not sufficient to grant the lender an interest in the golf course’s “cash collateral” if the business ends up in bankruptcy*. The result is that those revenues can be spent by the golf course borrower in the bankruptcy case to cover its administrative or operating expenses over the objection of the lender.