Make-Whole Claim Lessons From Hertz Bankruptcy Ruling

By Louis Chiappetta, Lucy Kweskin and Samuel Rabuck (January 20, 2022, 3:35 PM EST) -- Given the uncertainty of their enforceability in a bankruptcy court, make-whole provisions have long been a source of contention for debtors and creditors alike.

Last month, the U.S. Bankruptcy Court for the District of Delaware offered some clarity, when U.S. Bankruptcy Judge Mary Walrath issued an opinion in Wells Fargo Bank NA v. Hertz Corp.[1] keeping alive claims for an approximately $136 million make-whole payment with respect to Hertz's 2026/2028 notes but dismissing make-whole claims of approximately $12 million for Hertz's 2022/2024 notes.

Additionally, the court dismissed the noteholders'[2] demand for contract-rate post-petition interest, which would have amounted to approximately $40...

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