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Saybrook Manufacturing: Is Cross-Collateralization Moot?, Karen Gebbia, Lawrence E. Oscar

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This article examines the Saybrook decision in the context of prior case law and the general principles underlying the Code. The first section lays the foundation for an analysis of Saybrook by identifying the fundamental tenets of the Code and outlining the protections available under the Code to preserve secured creditors' property interests in their collateral and to induce lenders to provide DIPs with new credit. The next section defines cross-collateralization, analyzes the Saybrook decision in the context of prior case law, and considers whether cross-collateralization is permissible under the Code's express provisions and general policies. The authors conclude that …