U.S. Trustee challenges protection of $2.33 million in estate cash
The U.S. Trustee objected to Sea Palms’ request to waive Bankruptcy Code requirements governing the protection of estate deposits. According to the UST’s omnibus response, the debtor held $2.32 million in a reserve account and approximately $12,700 in an investment account at Ameriprise through Comerica as of May 2026, with most of the combined $2.33 million invested in a BNY Dreyfus government cash-management money market fund.
The UST argued that the fund does not constitute direct government securities satisfying section 345 and that Sea Palms had not shown cause for a waiver. It asked the court to require the money to be maintained in designated debtor-in-possession accounts at UST-approved depositories. The dispute matters because an adverse ruling could force Sea Palms to relocate substantially all of its available cash and alter its treasury arrangements during the opening weeks of this Subchapter V case. The July 14 docket entries record that hearings occurred but do not provide a supported disposition.