Also known as: adequate protections · adequately protect · adequately protects · adequately protecting · adequately protected · § 361 protection
Written by attorneys · grounded in primary & secondary sources — see below
Protection afforded to a secured creditor's interest in collateral during bankruptcy proceedings to prevent diminution in value. Measures such as periodic cash payments, replacement liens, or other relief that yields the indubitable equivalent satisfy the requirement.
Amber Alonzo sues on behalf of a proposed class of consumers harmed by a defective product. Opponents argue that her personal stake is too small to ensure vigorous advocacy. The court examines whether she will fairly and adequately protect class interests before certifying under Rule 23(a)(4).
Alan Ackerman seeks to modify a trust to sell land earlier than the settlor directed. One beneficiary refuses consent. The court approves the change only after confirming that the nonconsenting beneficiary's interests will be adequately protected by the proposed distribution scheme.
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Anita Ali's household goods are seized under a writ of replevin without prior notice. She claims the procedure violates due process. The court holds that the statutory scheme must provide adequate protection against erroneous deprivation before property is taken.
A state law restricts the sale of filled milk. Producers argue the statute lacks any rational basis. The Court upholds the measure, finding that the legislative judgment is entitled to deference when the regulatory scheme adequately protects public health interests.
A long-term aluminum supply contract contains a price formula that fails when energy costs spike unexpectedly. The buyer seeks reformation. The court considers whether an equitable adjustment can be crafted that adequately protects both parties' original expectations.
A city conditions a building permit on dedication of land for a bike path. The owner challenges the requirement as an uncompensated taking. The Court requires the city to show that the exaction is roughly proportional to the impact of the proposed development so that the owner's property interest receives adequate protection.
Section 361 lists three nonexclusive examples: periodic cash payments to compensate for any decrease in value, an additional or replacement lien on other property, and other relief that provides the indubitable equivalent of the secured creditor's interest.
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The party seeking to use, sell, or lease the collateral, usually the debtor or trustee, must prove that the secured creditor's interest is adequately protected.
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No. An undersecured creditor is not entitled to interest or other compensation for the delay in foreclosure caused by the automatic stay. Only protection against actual decline in collateral value is required.
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Under section 362(d)(1) the court must grant relief from the stay for cause, including lack of adequate protection of the creditor's interest in property.
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Value is determined under section 506 as of the date of the bankruptcy filing, and the creditor is entitled to protection only against postpetition decline in that value.
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…394 P. 2d 182 (1964); Jenad, Inc. v. Scarsdale , 18 N. Y. 2d 78, 218 N. E. 2d 673 (1966). We think this standard is too lax to adequately protect petitioner's right to just compensation if her property is taken for a public purpose. Other state courts require a very exacting correspondence, described as the "specifi[c] and uniquely…