Another Bankruptcy Court Rules the Solvent Debtor Exception Survived Enactment of the Bankruptcy Code

Summary

This article discusses whether the pre-Bankruptcy Code solvent debtor exception requiring the payment of postpetition interest to dissenting unsecured creditors under a Chapter 11 plan survived the enactment of the Bankruptcy Code in 1978. This issue has been the subject of a handful of recent court rulings, perhaps most notably in the Chapter 11 case of Ultra Petroleum Corp. in connection with a protracted battle over the debtor's obligation to pay make-whole premiums to unsecured noteholders.