D owes C $200,000. C has a lien on equipment worth $250,000. The value of the equipment is declining by $1,000 a month. 

(a) Under these facts, can C's "equity cushion" be the adequate protection?  

(b)Does it make any difference if another creditor, Schmiege, has a junior lien on the equipment securing a $60,000 debt?  

(c)What if D's debt to C is based on a note that provides for interest of 10% per year?  

 

Answer rating: 100% (QA)

a No Cs equity cushion cannot be considered adequate protection because the value of the equipment i... View the full answer