The 5th Circuit Court of Appeals handed down their decision late Jan. 17 on the “Make Whole” case for Ultra Petroleum (UPL). The 27 page opinion can found here.
“For that reason and others explained above, we REVERSE in part, VACATE in part, and REMAND for further proceedings consistent with this opinion”
“In that court’s view, a plan impairs a creditor if it refuses to pay an amount the Bankruptcy Code independently disallows. In reaching that conclusion, the bankruptcy court split from the only court of appeals to address the question, every reported bankruptcy court decision on the question, and the leading treatise discussing the question. We reverse and follow the monolithic mountain of authority holding the Code—not the reorganization plan—defines and limits the claim in these circumstances. Because the bankruptcy court saw things differently, it ordered the debtors to pay certain creditors a contractual Make-Whole Amount and postpetition interest at a contractual default rate. We vacate and remand those determinations for reconsideration. “
A partial victory for UP. The court REMANDED the Make Whole AMOUNT. “One last note on our remand of the Make-Whole Amount.”
UPL did win that “The creditors here have no legal right to post-petition interest at the default rates.” This was a dispute about what was the appropriate rate to use.