The U.S. Bankruptcy Appellate Panel for the Ninth Circuit recently decided In re Premier Golf Prop., LP, 477 B.R. 767 (B.A.P. 9th Cir. 2012) which addressed the issue of whether “postpetition revenue from the Golf Club’s green fees and driving range fees [was] rents, proceeds, or profits of the Bank’s prepetition security, and therefore, [does] not constitute cash collateral.”  Ultimately, the Court held that the fees were not part of the Bank’s security.  Interestingly, the Court held the fees were not rents because they were tied more to the services/entertainment of the golf course and less to the land itself.  The decision underscores the necessity of understanding how security instruments encumber revenue streams.

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