Property with a liquidation value of 1.7 mil and a FMV of 2.4 mil. Total debt is way more than that. There is also an assignment of rents. Believe it or not after depositions on Thursday of both appraisers (mine and theirs) the real estate is NOT declining in value and has been stable over the past year. So they are not entitled to adequate protection in the bankruptcy case on the value of the real estate since it is not declining in value and they don’t get interest on their claim because they are undersecured. What they do appear to get is adequate protection on the value of the assignment of rents. I think I need to value the assignment of rents and come up with adequate protection for that. The rents are cash collateral — like constantly regenerating accounts receivable. So long as evidence can be introduced that the rental income stream is consistent and is not decreasing, offer a post-petition replacement lien on future rents. (See 175 BR 755) If the rents are decreasing (or in danger), you may have to be more creative based on the debtor’s cashflow ability and the anticipated net rents. They are oversecured and therefore do get interest, which can eat away at an equity cushion as adequate protection. And the rents are cash collateral in bankruptcy, as Sumner said, so either they get the rent or you need to get permission to use the cash collateral, which also requires adequate protection. But a replacement lien on future rents is neither necessary nor sufficient because they already have a lien on all rents, past and future. An equity cushion could serve as adequate protection for the cash collateral use as well, but then the question becomes is how much of a cushion is there, and how long will it last. If it’s undersecured, then they ARE entitled to adequate protection, as the present value of their interest in the asset is declining at a rate equivalent to the discount rate applied to the secured portion of the claim. I don’t think you need cumulative adequate protection – if the rents are less than what would be required for adequate protection, more would be required; if the rents are greater, then the rents would be sufficient. If you need to use the rents for something else, then you will need alternate adequate protection, which can’t be a replacement lien on post-petition rents because they already have that.