Absolute Assignment of Rents

An assignment of rents treated as a full, complete and absolute transfer of all of the borrower’s interest in existing and future rents. In contrast, under an assignment of rents for security, the assignment is treated not as absolute but, instead, as creating alien on the rents in the lender’s favor. The most serious consequence to the debtor of characterization of an assignment of rents as “absolute” is that the rents belong to the lender, not the debtor, and may not be used by the debtor as cash collateral or otherwise.

Diabolical Questions: Why isn’t this a fradulent transfer?

Bankruptcy Code ยง 363. See also Assignment of Rents, Assignment of Rents for Security, Butner Case, Cash Collateral, Use of Cash Collateral.

Email Term