Split 9th Cir. Reverse PG&E Ch. 11 Interest Rate Decisions

By Rick Archer (August 30, 2022, 5:38 p.m. EDT) — The Ninth Circuit overruled two lower courts with a split decision finding that commercial creditors in California utility Pacific Gas and Electric’s Chapter 11 case should have seen each other grant a higher post-bankruptcy interest rate on their claims.

In an opinion issued Monday, the panel reversed the rulings of the bankruptcy and district courts with a 2-1 ruling that found that the Bankruptcy Code did not override a common law principle that a party who has filed for bankruptcy with more assets than liabilities cannot force a creditor to accept a post-bankruptcy interest rate lower than that agreed to by the parties prior to…

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