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Disallowance Defense Bankruptcy Code

Patterson Belknap Webb & Tyler LLP

Losing Momentum: Houston Bankruptcy Court Holds that Make-Whole Claims are Not the Economic Equivalent of Unmatured Interest...

In December of last year, we wrote about the Fifth Circuit’s two decisions – Ultra I, from January 2019, and Ultra II, from December, which replaced Ultra I – regarding make-whole claims in the Ultra Petroleum bankruptcy...more

Jones Day

Bolstering the Majority Rule: Bankruptcy Court Holds that Adjudication of Avoidance Liability Is Prerequisite to Disallowance of...

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The U.S. Bankruptcy Court for the Eastern District of North Carolina recently added some weight to the majority rule on an issue that has long divided bankruptcy and appellate courts. In In re Southern Produce Distributors,...more

Patterson Belknap Webb & Tyler LLP

The Solvent Debtor Exception Lives . . . Probably: Fifth Circuit Withdraws Controversial Ruling, but Key Holding Remains

Ultra Petroleum entered bankruptcy in significant financial distress, but then – thanks to a spike in oil prices – the debtor’s fortunes changed almost literally overnight. It is generally accepted that a solvent debtor must...more

Jones Day

The Fifth Circuit Rules That a Make-Whole Premium Is Unmatured Interest Generally Disallowed in Bankruptcy

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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

A&O Shearman

An Interesting Decision: Fifth Circuit Questions Whether Make-Wholes Should Be Disallowed as ‘Unmatured Interest’

A&O Shearman on

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

Jones Day

Caveat Emptor—Anti-Assignment Clause Renders Transferred Claim Unenforceable

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Amid the explosion of trading in claims against distressed and bankrupt entities, courts in recent years have issued numerous rulings of interest to both buyers and sellers. Notable decisions have addressed, among other...more

Morrison & Foerster LLP

Buyer Beware: Third Circuit Confirms Claims are Subject to Disallowance Despite Sale to Third Party

The Third Circuit in In re KB Toys, Inc. recently affirmed a decision of the Delaware District Court, holding that trade claims are subject to disallowance under section 502(d) of the Bankruptcy Code despite their subsequent...more

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