Court gives trustee final cash-collateral authority
The court entered a final order allowing Chapter 11 trustee Claudia Z. Springer to use Kentucky Owl cash collateral under an attached budget, giving the estate continuing operating liquidity while preserving Fifth Third Bank's collateral package. The Final Cash Collateral Order grants Fifth Third adequate protection for diminution in collateral value, requires cash consideration for collateral sales unless the bank agrees otherwise, and keeps prior cash-collateral protections in place except as modified by the final order.
The order also creates a near-term cash-management checkpoint: beginning May 29, 2026, Fifth Third may issue a cash-collateral notice to sweep excess cash above the operating cushion to prepetition debt, subject to five business days' notice and no more than one notice every 30 days. The trustee carveout is senior to the lender's claims and covers trustee compensation, U.S. Trustee fees, allowed professional fees through termination capped at 120% of budgeted professional fees, plus a $100,000 post-termination cap. The practical read-through is that the trustee has a court-approved runway, but lender oversight and cash sweeps now define how much liquidity remains available for sale and administration expenses.