Ultra Petroleum Corp. v. Ad Hoc Committee of Unsecured Creditors of Ultra Resources, Inc., No. 17-20793 (5th Cir. 2019)
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The Fifth Circuit reversed the bankruptcy court's order requiring debtors, Ultra Petroleum, to pay certain creditors a contractual Make-Whole Amount and postpetition interest at a contractual default rate. In this case, debtors entered bankruptcy insolvent and now are solvent. At issue was whether the creditors were impaired by a plan that paid them everything allowed by the Bankruptcy Code.
The court held that a creditor is not impaired by a reorganization plan simply because it incorporates the Bankruptcy Code's disallowance provisions. Because the bankruptcy court found otherwise, it did not address whether the Bankruptcy Code disallows the Make-Whole Amount or post-petition interest, and if not, how much debtors must pay the Class 4 Creditors. Therefore, the court reversed in part, vacated in part, and remanded for the bankruptcy court to answer these issues in the first instance.
The court issued a subsequent related opinion or order on November 26, 2019.
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