Client Alert: Fifth Circuit Reverses Course on Allowability of Make-Whole Provisions in Bankruptcy

On November 26, 2019, a panel of the United States Court of Appeals (the “Court”) for the Fifth Circuit vacated its own prior decision in In re Ultra Petroleum Corp., which stated that make-whole provisions included in a loan agreement are likely unenforceable in bankruptcy. The Fifth Circuit panel issued a new opinion, stating that there is no reason to believe that make-whole provisions are unenforceable where the debtor is solvent.