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Email On August 26, 2014, Judge Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York ruled that (i) the debtors could satisfy the cramdown requirements of section 1129(b) of the Bankruptcy Code by issuing to certain secured noteholders replacement notes with interest rates calculated at the prime rate plus a non-payment risk component, as opposed to a market rate, and (ii) the debtors’ noteholders were not entitled to payment of make-whole premiums as part of their allowed claims. In re MPM Silicones, LLC, Case No. 14-22503-rdd (Bankr. S.D.N.Y.). By favoring a below-market risk premium in the cramdown context, this decision reinforces for lenders the importance of presenting clear evidence on plan feasibility and the risks facing a company post-chapter 11 emergence in order to be awarded higher interest rates on any cramdown paper. https://www.cadwalader.com/resources/clients-friends-memos/no-market-interest-rate-and-no-make-whole-momentive-performance-court-rejects-lender-arguments-against-confirmation