Play video

Adequate Protection and Setoff in Bankruptcy

Learn about the fundamental bankruptcy concept of adequate protection of a secured claim and become acquainted with the general principle of setoff.


I. Adequate Protection and the Value of the Lien

Bankruptcy often impinges on the rights of parties holding interests in estate property. For instance, the automatic stay routinely prevents secured creditors from foreclosing on their collateral. Due to the automatic stay and other bankruptcy-related impositions, secured creditors and others holding interests in estate property frequently see the value of their interests diminish. To offset the resulting financial harm, the Bankruptcy Code...