The Legal Landscape of Make Whole Payments
Podcast - Credit Funds: Make-Wholes and Cramdowns: Understanding the Recent Second Circuit Momentive Decision
Bill on Bankruptcy: Make-Whole Premiums, Lehman, ResCap
Bill on Bankruptcy: Kodak Plan Bumps the Debt, Craters Stock
Bill on Bankruptcy: AMR Make-Whole Opinion Vulnerable on Appeal
Hertz: Third Circuit Weighs In On Make-Whole Premiums And The “Solvent-debtor Exception” In Chapter 11 Cases - A handful of recent high-profile court rulings have considered whether a chapter 11 debtor is obligated to pay...more
A handful of recent high-profile court rulings have considered whether a chapter 11 debtor is obligated to pay postpetition, pre-effective date interest ("pendency interest") to unsecured creditors to render their claims...more
The US Court of Appeals for the Third Circuit recently held that Hertz’s noteholders are entitled to post-petition interest payments, including make-whole premiums, at the contract rate as part of the company’s Chapter 11...more
Make-whole clauses (also known as prepayment premiums, call premiums or call protection) are provisions in financing transactions that require the borrower to make a specified payment to the lender if a loan is prepaid before...more
In Short - The Situation: Courts have disagreed over whether a make-whole premium triggered by a borrower's bankruptcy filing must be disallowed as unmatured interest. They have also disputed whether the "solvent-debtor...more
MODIFICATION OF SECURED LOAN UNDER CRAMDOWN CHAPTER 11 PLAN WARRANTED DUE TO PLAN FEASIBILITY THREAT - Many recent court rulings concerning the treatment of secured creditors under a chapter 11 plan have focused on...more
Perhaps surprisingly given the rarity of such cases, a handful of high-profile court rulings recently have addressed whether a solvent chapter 11 debtor is obligated to pay postpetition, pre-effective date interest ("pendency...more
This past year was marked by extraordinary deal activity. Record breaking M&A activity drove record breaking private credit activity. Private equity M&A activity was at a substantial high, with over 8,500 deals worth $2.1...more
Takeaways - “Make-wholes” — one-off payments required if debt is prepaid or, in certain cases, otherwise accelerated — have generated litigation, with debtors contending they can continue to pay lenders under the debt’s...more
Jeffrey Cohen, chair of the firm’s Bankruptcy & Restructuring Department, breaks down the unique circumstances of a decision in the Mallinckrodt Chapter 11 case and shares his view on how it may affect the legal landscape of...more
Sounds like an odd combination—enforceability of make-whole and post-petition interest and patent law. It is. But relevant nonetheless. Recall that a key argument in the ongoing Ultra Petroleum dispute regarding the...more
On October 26, 2020, the U.S. Bankruptcy Court for the Southern District of Texas issued a long-awaited ruling on whether natural gas exploration and production company Ultra Petroleum Corp. ("UPC") must pay a make-whole...more
In re Ultra Petroleum Corp. provides substantial support for the allowance of make-whole amounts pursuant to 11 U.S.C. § 502(b)(2) and that such are neither interest, unmatured interest nor the economic equivalent of...more
A recent bankruptcy case now on appeal is being closely watched for the significant economic repercussions it could have on debtors and creditors alike. On October 26, 2020, in In re Ultra Petroleum Corp., the U.S. Bankruptcy...more
On Oct. 26, in a highly anticipated decision, the Bankruptcy Court for the Southern District of Texas, In re Ultra Petroleum Corp. Corp., et al., Case No. 16-32202 (Bankr. S.D. Tex. 2020), held that certain noteholders were...more
In the July/August 2019 issue of the Business Restructuring Review, we discussed a landmark decision by the U.S. Court of Appeals for the Fifth Circuit in In re Ultra Petroleum Corp., 913 F.3d 533(5th Cir. 2019) ("Ultra I")....more
Despite political and economic uncertainties, markets and deal activity were resilient in 2019, and strong fundamentals remain in place heading into 2020. Companies continue to face a challenging litigation and enforcement...more
A series of decisions over the past year — on issues such as make-whole premiums, intercreditor agreements, backstops for rights offerings and nonconsensual third-party releases — will likely have a significant impact in 2020...more
In In re Ultra Petroleum Corp., 913 F.3d 533(5th Cir. 2019), the U.S. Court of Appeals for the Fifth Circuit ruled that a "make-whole," or "prepayment," premium owed on unsecured notes issued by a chapter 11 debtor...more
In Momentive Performance Materials Inc. v. BOKF, NA (In re MPM Silicones, L.L.C.), 874 F.3d 787 (2d Cir. 2017), cert. denied, 138 S. Ct. 2653 (2018), the U.S. Court of Appeals for the Second Circuit affirmed a number of lower...more
In March 2019, Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York ruled that lenders using clear and unambiguous language in their loan agreements may be entitled to prepayment...more
In In re 1141 Realty Owner LLC, et al., No. 18-12341 (SMB), 2019 WL 1270818 (Bankr. S.D.N.Y. March 18, 2019), Bankruptcy Judge Stuart M. Bernstein of the U.S. Bankruptcy Court of the Southern District of New York recently...more
On March 18, 2019, Judge Stuart M. Bernstein of the United States Bankruptcy Court for the Southern District of New York issued a decision enforcing a mortgage lender’s claim for a prepayment premium (a/k/a make-whole or...more
On January 17, 2019, the United States Court of Appeals for the Fifth Circuit issued a decision holding that “impairment” under a plan of reorganization does not arise even if a creditor is paid less than it would be entitled...more
Over the Horizon: The rise and fall of nuclear new build in the United Kingdom - September 2016 was supposed to herald the dawn of a new era for the nuclear power industry in the United Kingdom. The UK Government had...more