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
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
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
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
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 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
A recent decision clarified the concept of impairment when a plan of reorganization provides for creditors to receive 100% of their allowed claims. The U.S. Court of Appeals for the Fifth Circuit held that creditors are...more
On January 17, 2019, the Fifth Circuit held that a creditor is not impaired for the purpose of voting on a plan if it is the Bankruptcy Code (as opposed to plan treatment) that impairs a creditor’s claim. The court further...more
On January 17, 2019, the U.S. Court of Appeals for the Fifth Circuit delivered a much-awaited opinion with respect to whether Ultra Petroleum Corporation (“UPC”) was required to pay its noteholders contractual make-whole...more
In In re Ultra Petroleum Corp., 2017 BL 335015 (Bankr. S.D. Tex. Sept. 21, 2017), the U.S. Bankruptcy Court for the Southern District of Texas ruled that certain private-placement noteholders were entitled to receive a...more
In Momentive Performance Materials Inc. v. BOKF, NA (In re MPM Silicones, L.L.C.), 2017 BL 376794 (2d Cir. Oct. 27, 2017) ("Momentive"), the U.S. Court of Appeals for the Second Circuit, in a long-anticipated decision,...more
Last week the Second Circuit issued its long-awaited opinion on the appeals of plan confirmation taken by the first lien, 1.5 lien and subordinated noteholders in In re MPM Silicones, LLC (“Momentive”). With one exception,...more
The Situation: In In re MPM Silicones, L.L.C., secured noteholders argued that replacement notes distributed to them under a cram-down chapter 11 plan should bear market-rate interest rather than the lower formula rate...more
Some term loans allow borrowers to redeem debt. But to protect a lender’s expected yield, such loans often impose a “make-whole premium” on redemption. That is, they require compensation to the lender for the borrower’s...more
In a November 17, 2016 ruling likely to impact ongoing debt restructurings, pending bankruptcy proceedings and negotiations of new debt issuances, the Third Circuit recently overturned refusals by both the Delaware bankruptcy...more
Throwing yet another wrench into the long-running and hard fought bankruptcy proceedings of Energy Future Holdings Corp., et al., the Third Circuit recently reversed the decisions of the Delaware bankruptcy and district...more