361—Adequate protection.  (see p. 9). Usually done in first day orders.
1.    Ex.  ASC of 160k.  Property depreciating at 10%/year.  So, in one year, will be worth 144k.  The debtor will need to pay 16k cash payment or series of periodic payment over the next year to provide adequate protection under 361(a).  Could also give a lien on prop for this amount under 361(2).
2.    Determining amount of necessary protection.
a.    Amount of allowed secured claim:  The allowed secured claim is what needs to be protected, so it is necessary to figure out what that is b/4 determining the appropriate amount of protection that needs to be provided.
b.    Value of the collateral.  Value of the collateral may be difficult to determine—fmv v. liquidation value?
c.    How much it will depreciate in value over time, and what it can be sold for later.  Need to figure out how the product depreciates.  If product is highly specialized and may be difficult to sell later, especially if there is a buyer lined up now that might not be there later, the debtor may need to provide additional protection.
3.    Tax depreciation v. Actual depreciation.  If property is depreciating by 10%/year, but the debtor depreciates it at 20%/year for tax purposes, the creditor may try to argue that protection for 20% depreciation needs to be provided.  Debtor would argue that there is an artificiality to the tax process, so 10% is fine.  This latter arg makes more sense since you need to make sure creditor gets full value and nothing more—if they get prop at end of year, plus 20% depreciation from debtor and then sell prop that has only depreciated 10%, they have been overpaid.
4.    Adequate protection payments may or may not go to pay down principal.  Debtors will usually agree on this in advance
a.    Facts:  Debtor has agreement for 12 mi loan w/ interest only payments of 1.2 mil/year.  At time of filing, collateral worth 12.2 mil.  Adequate protection payments—1 mil/month.  Default on 11th payment, and collateral now worth 11.4 mil.
b.    Debtor arg:  Creditor hasn’t lost anything b/c even though collateral decreased to 11.4 mil, they have received 1 mil in the meantime and that has gone to principal.  May also say that at least a portion went to principal as soon as the collateral depreciated in value to the point that the debtor was under-secured.  At that point, the creditor isn’t entitled to post-pet interest. One circuit court case that is out there agrees w/ this position.
c.    Creditor arg:  payments were going to interest per the original agreement.  So, they are worse off b/c they went form being fully secured to under-secured by 600k.
5.    Foregoing adequate protection for post-pet, and post-confirmation interest.  Creditor may prefer to say that he is fully secured so that he can get post-pet interest under 506(b) and post-confirmation interest through present value payments under 1129(b)(2)(A)(i)(II).  Adequate protection litigation that fixes the value isn’t necessarily binding, but you could have problems going before the same judge and indicating a higher value of same prop for plan confirmation.