Make-Whole and No-Call Provisions in Bankruptcy: Developments, Strategies, Drafting Loan Documents and Indentures
A live 90-minute CLE video webinar with interactive Q&A
This CLE course will provide bankruptcy and lender counsel with an overview of the enforceability of make-whole or no-call provisions after In re The Hertz Corp., No 23-1169 (3d Cir., Sept. 10, 2024), and the solvent debtor exception. The panel will discuss the differences between the rights of unsecured creditors under Bankruptcy Code Section 502 and the options of secured creditors under Section 506(b). The panel will also discuss options outside the Fifth, Third, and Ninth Circuits.
Outline
- Overview
- Make-whole provisions in fixed-rate lending
- The concept and basic formula
- Key decisions
- In re The Hertz Corp., No 23-1169 (3d Cir., Sept. 10, 2024)
- Ultra Petroleum Corp. v. Ad Hoc Committee of OpCo Unsecured Creditors (In re Ultra Petroleum Corp.), No. 21-20008 (5th Cir. Oct. 14, 2022)
- Ad Hoc Comm. of Holders of Trade Claims v. Pac. Gas & Elec. Co. (In re PG&E Corp.), 46 F.4th 1047 (9th Cir. 2022), cert. denied, 143 S.Ct. 2492 (2023)
- Other circuits
- Enforceability as a matter of state law
- No-call provisions: enforceability
- Critical issues in bankruptcy involving make-wholes (and no-calls) under the documents
- Is it triggered?
- How has the drafting changed in response to recent decisions?
- Critical issues of bankruptcy law
- Is the claim disallowed as "unmatured interest"?
- May the class be "unimpaired" and the claim disallowed?
- How can the solvent debtor exception save make-wholes?
Benefits
The panel will review these and other key issues:
- Will disallowance of make-whole claims under Section 502(b)(2) affect secured creditors' seeking make-whole payments pursuant to the exceptions under Section 506(b)?
- Is the impairment aspect of the ruling consistent with the statute? Could it be subject to further challenge in other circuits?
- What are best practices for counsel to lenders and bondholders to protect entitlement to make-whole premiums?
- How relevant are the methods of calculating a make whole payment in finding that it amounts or unmatured interest?
Faculty
Ferve E. Khan
Counsel
BakerHostetler
Ms. Khan is a practiced bankruptcy litigator and transactional attorney who has extensive experience in large-scale... | Read More
Ms. Khan is a practiced bankruptcy litigator and transactional attorney who has extensive experience in large-scale liquidations and restructurings. She has represented creditors in complex Chapter 11 bankruptcy cases in industries such as retail, automotive, financial and professional services. She has also litigated a wide range of matters in Chapter 11 and SIPA cases. She actively publishes and speaks on cutting-edge legal developments in the restructuring field and is Co-Chair of the American Bankruptcy Institute Bankruptcy Litigation Committee.
Close
Lucy F. Kweskin
Partner
Katten Muchin Rosenman
Ms. Kweskin is a partner in Mayer Brown's New York office and a member of the Global Restructuring practice. She... | Read More
Ms. Kweskin is a partner in Mayer Brown's New York office and a member of the Global Restructuring practice. She advises clients, with a special focus on lenders, on all stages of corporate restructurings (both in and out-of-court) with significant experience with forbearance agreements, foreclosures, restructuring support agreements, debtor-in-possession financing, 363 sales and chapter 11 plans. Ms. Kweskin frequently litigates bankruptcy-related disputes concerning valuation, make-whole claims, inter-creditor issues, fraudulent transfers, recharacterization, veil piercing, and breaches of fiduciary duty. In addition to lenders, she represents stakeholders across the capital structure including debtors, distressed acquirers, official committees of unsecured creditors, litigation financiers and landlords.
CloseEarly Discount (through 05/02/25)