Make-Whole Claims in Bankruptcy

Ubiquitous to debt agreements, make-whole provisions are designed to give lenders the benefit of their bargain if a borrower redeems the debt early. Such provisions and other forms of “call protection” might be enforceable outside of bankruptcy, but once a borrower files for chapter 11 the rules change.

For decades, bankruptcy practitioners and courts have grappled with the tension created by the Bankruptcy Code and make-whole claims – which can be asserted for tens or hundreds of millions of dollars. The extent to which a particular make-whole claim can survive a chapter 11 filing remains a very fact-specific and analytic-heavy question, even after the Third Circuit’s seminal Hertz opinion last year.

Emil Kleinhaus, Phil Anker, and Abid Quereshi, three seasoned bankruptcy lawyers, are no strangers to make-whole disputes. They will discuss with Octus’ Josh Neifeld everything you need to know about the current state of play of make-wholes, chapter 11 and where the market is evolving.