Summary:
Petromax sought to prohibit the use by the Debtor of cash collateral of all of the profits produced by convenience stores, or at least a portion of the funds attributable to rent payments, due to an assignment of “rents and emoluments from the premises” provision in a Deed of Trust.
In the present case, the bankruptcy court drew a distinction between income generated by the real property itself, which would constitute “rents”, and sales and services, which are merely sold or performed at the location, even if those services and sales relied on improvements on the real property.
That notwithstanding, because the convenience stores are owned by the debtor but actually operated by another entity, the facts show that, pursuant to N.C.G.S. § 47-20(b) and in the absence of a lease with the operator, a portion of the payments from the operator constitute rents and not “management fees.”
For a copy of the opinion, please see:
Arve Angell Eng- Assignment of Rents and Cash Collateral
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