Prior to the enactment of the Bankruptcy Code in 1978, courts generally determined that a debtor’s obligations to pay interest stop accruing as of the petition date. Section 502(b)(2) of the Bankruptcy Code prohibits the inclusion of “unmatured interest” in an allowed claim. Pre-Code common law recognized a so-called “solvent debtor” exception, whereby a solvent debtor continued to incur obligations to pay interest accruing after filing its bankruptcy petition.
The Bankruptcy Code provision has been a point of contention when a solvent debtor prosecutes and confirms a plan that does not provide for the payment of post-petition interest.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
