The court awarded OpCo Noteholders in excess of $320 million in Make-Whole Amount and post-petition interest, confirming that make-whole is an enforceable liquidated damage claim.

In early November, the Ninth Circuit held in In re New Investments, Inc. that a debtor was required to “cure” defaults to an agreement using a post-default interest rate, overturning its prior, decades-old decision In re Entz-White Lumber & Supply, Inc., which had held that a debtor could cure agreements at pre-default interest rates.

Background

Creditors seeking to file an involuntary petition against a debtor may want to consider doing their due diligence before using it as a tool in their ongoing disputes with a debtor.

Decision establishes framework for future rulings that covenants in midstream agreements do not run with the land.