Table of Contents

• Jurisdiction: United States

Table of Contents

Chapter 1: Bankruptcy and Banking Basics........................1

A. Bankruptcy Basics.........................................................................................1

1. Types of Cases................................................................................................1

2. Roster of Players............................................................................................2

B. Banking Basics...............................................................................................4

1. Account Types................................................................................................4

2. Other Cash-Management Products.............................................................5

3. Loan Types.....................................................................................................6

C. The Bankruptcy Case....................................................................................6

1. How Is the Bankruptcy Code Organized? .................................................. 6

2. The Petition Date and the Order for Relief.................................................7

3. The Automatic Stay.......................................................................................8

4. The Significance of Pre-Petition vs. Post-Petition......................................9

5. Where Debtors May Maintain Funds........................................................11

6. Use of Cash Collateral as a Capital Source...............................................12

7. New Credit...................................................................................................13

8. Protection of Privacy of In-Court Filings.................................................14

9. What Legal Authority Do Court-Appointed Trustees Have with Respect to Banking?........................................................................... 15

Chapter 2: Understanding the Debtor's Treasury-Management System............................................................17

A. Analyzing the Debtor's Treasury-Management System.........................17

B. Treasury-Management Example................................................................22

Chapter 3: Accounts............................................................27

A. Deposit Account Basics..............................................................................27

B. Deposit Accounts in Bankruptcy..............................................................28

1. Setoff.............................................................................................................28

a. General Setoff Principles....................................................................28

b. Setoff in Bankruptcy...........................................................................29

2. Turnover and Authority over Bank Accounts..........................................30

3. Account Freezes ........................................................................................... 32

a. Depositors Filing Chapter 7 Cases.....................................................33

b. Depositors Filing Chapter 11 Cases....................................................34

c. Freezes to Stop Post-Petition Payments of Pre-Petition Debts ........... 34

d. Potential Consequences of Failure to Communicate with a Debtor's Depository Institution..........................................................35

4. Debtor-in-Possession Accounts ................................................................. 36

a. Approved Depositories.......................................................................36

b. Opening the Debtor-in-Possession Accounts......................................37

c. Waiver of Compliance with § 345......................................................38

Chapter 4: Automated Clearing House (ACH) Transactions.... 39

A. Demystifying ACH Transactions.............................................................. 39

1. Terminology ................................................................................................. 39

2. An ACH Transaction, Step by Step............................................................ 41

3. Originator's Inability to Recall...