A corporate borrower’s bank accounts can provide powerful security for lenders, especially if the secured party knows that it can quickly and easily sweep the funds if the borrower defaults.

Trade creditors take note: even though Chapter 11 debtors may continue purchasing goods and services and may continue operating in the ordinary course of their business, an earned cash payment in the creditor’s hands may not be safe from recovery. Moreover if you are a party to a supply contract and under an obligation to continue to furnish goods or services, the payments you receive may be recoverable by a subsequently appointed trustee.

Everyday, most of us in the United States encounter evidence of relentless economic globalization. Gone are the days when American-brand automobiles dominated our roads. As a result of NAFTA, fresh Mexican produce fills the shelves of our local supermarkets. You are perhaps just as likely to fly overseas on Japan Air Lines, Aer Lingus or Lufthansa as on Northwest-Delta, American or United.

As the automotive industry continues to restructure, whether through self-liquidation or government intervention, suppliers will inevitably be confronted with many of the same issues prevalent 4-5 years ago, including a supplier’s obligation to continue to provide goods post-petition and the supplier’s rights to adequate assurance as a condition to such shipment.