A New York bankruptcy judge has refused to permit a debtor to use rents generated by its real property because the rents absolutely assigned to the lender pre-petition were not property of the debtor's bankruptcy estate.2 Before the bankruptcy filing, the lender sent the borrower a default notice and terminated the borrower's license to collect rents. The lender also directed tenants to pay rents to it and not the borrower, commenced a foreclosure action, and sought appointment of a receiver. Judge Lane of the Southern District of New York Bankruptcy Court observed that the language of the assignment agreement demonstrated that the parties intended an unconditional absolute assignment, and that the lender had revoked the debtor's license to collect rents before the bankruptcy case was filed. Judge Lane also determined that the lender had taken sufficient steps after the borrower's default to make the assignment of rents effective under New York law. He held that, until the lender's note is satisfied, the debtor cannot use the rents to fund a plan of reorganization.