Postpetition Interest

What every secured lender wants but what it gets only when it is oversecured.

Although oversecured lenders are often able to negotiate payment of postpetition interest, most courts hold that only accrual is required until the interest exhausts the lender’s equity “cushion” and eliminates the oversecured status because the lender’s “cushion” itself is not entitled to adequate protection.

Bankruptcy Code § 506(b). See also Adequate Protection, Equity Cushion, Oversecured Creditor, Single Asset Real Estate, Undersecured Creditor.

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