Financial Security Assurance, Inc. v. Tollman-Hundley Dalton, L.P.

This case involves a security agreement pursuant to which the debtor granted the creditor a security interest in the debtor’s hotel and in all rents, issues and profits associated with its operation. After the debtor filed a voluntary petition under Chapter 11 of the Bankruptcy Code, the creditor relied upon its prepetition security interest to seek accounting of the postpetition hotel revenues. Applying § 552 of Title 11 of the Bankruptcy Code, the bankruptcy court concluded that the prepetition security interest did not extend to postpetition hotel revenues derived from rent; thus, the…