Case number: 2:25-bk-22922 - KLE Equipment Leasing, LLC - Wisconsin Eastern Bankruptcy Court

Objecting, the debtor points to the court's July 16, 2025 order authorizing the debtor to pay the Bank adequate protection of $450 per month on its claim secured by the Cybertruck (ECF No. 123) -- an order entered after the Bank failed to contest the debtor's motion for adequate protection. ECF No. 345. As the debtor points out, the July 16 order provides that although a failure to make a required adequate protection payment is a default, if the Bank "asserts that a default has occurred, it must provide written notice of the default to Debtor and the Debtor's counsel via email. The Debtor shall have five business days to cure the default"; if the debtor fails to cure such a default, the Bank may then move for relief from the automatic stay. ECF No. 123 at 2-3.

The payment ledger the Bank filed in support of its motion shows that the debtor made $450 adequate protection payments in August through October 2025. The motion does not show that the debtor made a payment for November, but the motion also does not contend that the Bank gave the cure notice required by the July 16 order, that the debtor failed timely to cure, or that any such failure is sufficient cause for relief. Instead, the motion relies solely on the debtor's alleged failure to make payments due in June and July. What is more, the Bank's motion alleges as grounds for relief from the stay only that it is not adequately protected: it does not contend, e.g., that the Cybertruck is not necessary for an effective reorganization within the meaning of sec. 362(d)(2).

So, if the Bank's interest in the truck is adequately protected, then the motion states no plausible ground for relief. The extent of the Bank's entitlement to adequate protection is the subject of the July 16 order. Again, the Bank does not seek relief for a default under that order. Instead, it relies on allegations of missed contractual payments due after the petition date but before entry of the July 16 order. If the Bank contended that those payments left it inadequately protected (or in need of greater monthly adequate protection payments to secure that protection), it should have objected to the debtor's adequate protection motion. Having not done so, it cannot now claim that those June and July missed payments -- which do not alter the amount of the claim or the rate of collateral depreciation -- somehow establish a lack of adequate protection.

The Bank also seeks an order that the debtor abandon the bankruptcy estate's interest in the Cybertruck. But about this all the motion states is, "The allegations of the foregoing paragraphs indicate that the Property is burdensome and of inconsequential value and benefit to the bankruptcy estate. The Debtor in Possession should be ordered to abandon the estate's interest, if any, in the Property pursuant to 11 U.S.C. §554(b)." ECF No. 301 at 3. That waive of the hand and conclusory recitation of section 554(b)'s operative language does not "state with particularity the grounds" for granting abandonment, as required by Fed. R. Bankr. P. 9013. In a reorganization case like this one, collateral is not subject to abandonment merely because it secures debt that is greater than its value. If that were the case, few chapter 11 cases would proceed beyond the 14-day notice period for motions to abandon, no matter how important the collateral to the debtor's effort to reorganize.

For these reasons, Fifth Third Bank's motion for relief from the automatic stay and for abandonment (ECF No. 301) is DENIED.

s/ G. Michael Halfenger
Chief Bankruptcy Judge

(RE: 301 Motion for Relief from Stay as to 2024 Tesla Cybertruck, VIN: 7G2CEHED8RA012267., Motion to Abandon ). (Halfenger, G.) (Entered: 12/09/2025)