The US Court of Appeals for the Third Circuit on September 10, 2024 issued its anticipated opinion in In re The Hertz Corp., with a majority holding that make-whole premiums constitute unmatured interest disallowed by the US...more
The United States Court of Appeals for the Fifth Circuit issued a ruling on Oct. 14, 2022 regarding the treatment of make-whole premiums in bankruptcy. The court held that claims for payment of a make-whole premium are the...more
The COVID-19 pandemic is forcing many businesses to close, leaving landlords in the lurch. The COVID-19 pandemic continues to shake up the nation’s economy. Long-standing companies such as JC Penney, J. Crew, Neiman...more
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
The U.S. Bankruptcy Court for the Southern District of New York recently added some weight to the majority rule on a hot-button issue for claims traders. In In re Firestar Diamond, Inc., 615 B.R. 161 (Bankr. S.D.N.Y. 2020),...more
Disagreeing with the much-critiqued SDNY opinion in Enron, the SDNY bankruptcy court disallowed claims brought by secondary transferees because the original claimants allegedly received millions of dollars in fraudulent...more
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
The Bankruptcy Code creates a rebuttable presumption that a proof of claim is prima facie evidence of the claim's validity and amount. Courts disagree, however, over whether that presumption also applies in a proceeding to...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 SummitBridge Nat’l Invs. III, LLC v. Faison, 915 F.3d 288 (4th Cir. 2019), the U.S. Court of Appeals for the Fourth Circuit ruled that an unsecured or undersecured creditor may include postpetition attorney’s fees and...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
While the question of what interest rate applies to a claim in bankruptcy might seem, at first glance, to be straightforward — it is not. Depending on the circumstances, a creditor might be entitled to no interest at all,...more
In the case In re Lehman Brothers Holdings Inc., 855 F.3d 459 (2d Cir. 2017), the U.S. Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Brothers employees for...more
Section 510(b) of the Bankruptcy Code provides a mechanism designed to preserve the creditor/shareholder risk allocation paradigm by categorically subordinating most types of claims asserted against a debtor by equityholders...more
Section 502(e)(1)(B) of the Bankruptcy Code allows debtors to seek disallowance of certain types of contingent claims to avoid being twice liable on a single obligation. It has the added benefits of facilitating debtors’...more
A new decision from the U.S. Court of Appeals for the Ninth Circuit poses a serious threat to mortgage companies that service mortgages of chapter 13 debtors. Mortgage servicers should be aware of the case's implications and...more