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Ninth Circuit Finally Abandons Entz-White: Default-Rate Interest Required to Cure and Reinstate Secured Debt Under Chapter 11 Plan

In 1994, Congress amended the Bankruptcy Code to add section 1123(d), which provides that, if a chapter 11 plan proposes to "cure" a default under a contract, the cure amount must be determined in accordance with the underlying agreement and applicable nonbankruptcy law. Since then, a substantial majority of courts, including the U.S. Court of Appeals for the Eleventh Circuit, have held that such a cure amount must include any default-rate interest required under either the contract or applicable nonbankruptcy law.

USA, Banking, Insolvency & Restructuring, Litigation, Jones Day, Default (finance), Ninth Circuit, Eleventh Circuit
Ninth Circuit Abandons Entz-White: Default-Rate Interest Required to Cure and Reinstate Secured Debt Under Chapter 11 Plan

In 1994, Congress amended the Bankruptcy Code to add section 1123(d), which provides that, if a chapter 11 plan proposes to "cure" a default under a contract, the cure amount must be determined in accordance with the underlying agreement and applicable nonbankruptcy law. Since then, a substantial majority of courts, including the U.S. Court of Appeals for the Eleventh Circuit, have held that such a cure amount must include any default-rate interest required under either the contract or applicable nonbankruptcy law. See, e.g., JPMCC 2006-LDP7 Miami Beach Lodging, LLC v.

USA, Banking, Insolvency & Restructuring, Litigation, Jones Day, Ninth Circuit
Eleventh Circuit weighs in on section 1123(d): reinstatement of defaulted loan agreement under chapter 11 plan requires payment of default-rate interest

In 1994, Congress amended the Bankruptcy Code to, among other things, add section 1123(d), which provides that, if a chapter 11 plan proposes to “cure” a default under a contract, the cure amount must be determined in accordance with the underlying agreement and applicable nonbankruptcy law. Since then, a majority of courts have held that such a cure amount must include any default-rate interest required under either the contract or applicable nonbankruptcy law. A ruling recently handed down by the U.S. Court of Appeals for the Eleventh Circuit endorses this view.

USA, Insolvency & Restructuring, Litigation, Jones Day, Interest, Default (finance), Eleventh Circuit
Weathering the storm: Vitro’s Concurso plan is theoretically enforceable in the United States . . . but not this time . . . under these circumstances

On November 28, 2012, the United States Court of Appeals for the Fifth Circuit published an opinion affirming the bankruptcy court’s ruling that the Mexican Plan of Reorganization (the “Concurso Plan”) of the Mexican glass-manufacturing company, Vitro, S.A.B.

USA, Insolvency & Restructuring, Litigation, Haynes and Boone LLP, Comity, Stay of execution, United States bankruptcy court, Fifth Circuit
Weathering the storm: vitro’s concurso plan is manifestly contrary to public policy . . . at least for now

On June 13, 2012, the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”) published an opinion ruling on whether the Mexican Plan of Reorganization (the “Concurso Plan”) of the Mexican glass-manufacturing company, Vitro, S.A.B.

USA, Texas, Insolvency & Restructuring, Litigation, Public, Haynes and Boone LLP, Debtor, Comity, Title 11 of the US Code, United States bankruptcy court, US District Court for Northern District of Texas