Court Opinion

ID: 8274454
Source: CourtListenerOpinion
Date Created: 2022-10-17 00:01:12.03809+00
Date Added: 2024-06-11T16:43:37.342383
License: Public Domain

Case: 21-20008     Document: 00516509201        Page: 1   Date Filed: 10/14/2022

          United States Court of Appeals
               for the Fifth Circuit                               United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                                                   October 14, 2022
                                 No. 21-20008                        Lyle W. Cayce
                                                                          Clerk

   In re: Ultra Petroleum Corporation; Keystone Gas
   Gathering, L.L.C.; Ultra Resources, Incorporated;
   Ultra Wyoming, Incorporated; Ultra Wyoming LGS,
   L.L.C.; UP Energy Corporation; UPL Pinedale, L.L.C.;
   UPL Three Rivers Holdings, L.L.C.;

                                                                     Debtors,

   Ultra Petroleum Corporation; Keystone Gas
   Gathering, L.L.C.; Ultra Resources, Incorporated;
   Ultra Wyoming, Incorporated; Ultra Wyoming LGS,
   L.L.C.; UP Energy Corporation; UPL Pinedale, L.L.C.;
   UPL Three Rivers Holdings, L.L.C.,

                                                                  Appellants,

                                     versus

   Ad Hoc Committee of OpCo Unsecured Creditors; OpCo
   Noteholders; Allstate Life Insurance Company;
   Allstate Life Insurance Company of New York,

                                                                   Appellees.

                 Appeal from the United States Bankruptcy Court
                        for the Southern District of Texas
                             USBC No. 4:16-MC-3064
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                                    No. 21-20008

   Before Jolly, Elrod, and Oldham, Circuit Judges.
   Jennifer Walker Elrod, Circuit Judge:
          Bankruptcy is ordinarily for the insolvent. The Bankruptcy Code
   enables economically viable businesses in financial distress to restructure and
   shed some of the debt burden that crippled them. Sometimes, however,
   initially insolvent debtors regain solvency during extended bankruptcy
   proceedings. This is one such case. Ultra Petroleum Corp. (HoldCo) and its
   affiliates, including its subsidiary Ultra Resources, Inc. (OpCo), entered
   Chapter 11 bankruptcy deep in the hole. But during the bankruptcy process,
   these debtors (collectively, Ultra) hit it big—as natural gas prices soared,
   they became supremely solvent. What, then, of their debt and interest must
   they (re)pay their creditors now that they can?
          Ultra proposed a $2.5 billion bankruptcy plan. It provided that
   OpCo’s creditors would be paid—in full and in cash—their outstanding
   principal and all interest that had accrued before bankruptcy, plus interest on
   both at the Federal Judgment Rate for the duration of the bankruptcy
   proceeding. Two groups of creditors complain that the plan falls some $387
   million short: They contend that they are entitled to a “Make-Whole
   Amount,” a lump sum calculated to give them the present value of the
   interest payments they would have received but for Ultra’s bankruptcy.
   These creditors further claim that they are owed post-petition interest at a
   contractually specified rate that is materially higher than the Federal
   Judgment Rate.
          This case asks us to decide: first, whether the Bankruptcy Code
   precludes the creditors’ claims for the Make-Whole Amount; second, even
   if it does, whether the traditional solvent-debtor exception applies; and third,
   whether post-judgment interest is to be calculated at the contractual or
   Federal Judgment rate. We hold that the Bankruptcy Code disallows the
   Make-Whole Amount as the economic equivalent of unmatured interest. But
   because Congress has not clearly abrogated the solvent-debtor exception, we

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   hold that it applies to this case. And the solvent-debtor exception demands
   that Ultra pay what it promised now that it is financially capable. We likewise
   hold that, given Ultra’s solvency, post-petition interest is to be calculated
   according to the agreed-upon contractual rate. Thus, we AFFIRM.
                                               I.
           Ultra is a family of natural gas exploration and production companies.
   In 2014 and 2015, a sharp decline in natural gas prices drove Ultra to
   insolvency and thence to the protection of Chapter 11 bankruptcy in early
   2016. During the bankruptcy proceedings, the same volatile commodity
   prices that hurled Ultra into insolvency propelled the debtors back into
   solvency. Indeed, Ultra became “massively solvent.”
           Ultra proposed a plan that would pay—in full and in cash—all
   unsecured claims, including those of its noteholders and revolving credit
   facility creditors (collectively, Creditors). 1 Ultra would thus pay Creditors’
   entire outstanding principal along with all accrued pre-petition interest at the
   contractual rate, plus post-petition interest at the Federal Judgment Rate, as
   specified at 28 U.S.C. § 1961(a). 2 In Ultra’s view, the plan paid Creditors
   fully for every claim that the Bankruptcy Code allowed. For this reason,
   Ultra classified these Creditors as “unimpaired” under 11 U.S.C.

           1
            Unless otherwise indicated, “Creditors” will generally refer to both groups of
   creditor–appellees: (1) OpCo Noteholders (a group of over forty insurance companies,
   hedge funds, and other institutional investors); and (2) the Ad Hoc Committee of OpCo
   Unsecured Creditors, which represents both note and revolver creditors (a similar group
   of twenty investors).
           2
             The Federal Judgement Rate as of April 29, 2016, the date of Ultra’s bankruptcy
   petition (the applicable rate for the confirmed plan) was 54 basis points (0.54%), which is
   materially lower than the contractual rate, defined as the greater of 2% over either of two
   benchmark rates. 28 U.S.C. § 1961; Post-Judgment Interest Rates – 2016, (Week Ending
   April 22, 2016), United States District & Bankruptcy Court, Southern District of Texas,
   https://www.txs.uscourts.gov/page/post-judgment-interest-rates-2016.

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   §§ 1123(a)(2), 1124. And given their status as “unimpaired,” Creditors were
   thus “conclusively presumed to have accepted the plan” per § 1126(f). In
   other words, they had no right to vote on it.
          Creditors objected. They contended that the plan did impair them
   because it did not allow for claims stemming from two contractual provisions
   in their debt instruments—a shortfall of some $387 million.           Not so,
   countered Ultra—those two provisions simply did not give rise to allowable
   claims under the Bankruptcy Code.
          The parties stipulated that this dispute could be resolved after plan
   confirmation. Ultra created a $400 million reserve to cover the alleged
   shortfall, and the bankruptcy court confirmed the plan. The bankruptcy
   court then addressed Creditors’ “impaired” status vis-à-vis the disputed
   amounts, concluding that Creditors remained impaired unless they were paid
   the full amount permitted under applicable non-bankruptcy law. In re Ultra
   Petroleum Corp., 575 B.R. 361, 366–75 (Bankr. S.D. Tex. 2017). Ultra
   appealed directly to this court.
          We reversed. In re Ultra Petroleum Corp., 943 F.3d 758 (5th Cir. 2019).
   We held that “[w]here a plan refuses to pay funds disallowed by the Code,
   the Code—not the plan—is doing the impairing.” Id. at 765. The issue of
   impairment thus set aside, the only question remaining was whether
   Creditors were, in fact, entitled to the disputed claims under the Bankruptcy
   Code’s disallowance provisions.        On this score, we remanded to the
   bankruptcy court to render a decision in the first instance. Id. at 765–66.
          On remand, the bankruptcy court faced the dispositive question of
   whether Creditors’ disputed claims were indeed disallowed under the
   Bankruptcy Code. Creditors’ disputed claims stemmed from two OpCo debt
   instruments:

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           1.      OpCo Notes issued under a Master Note Purchase Agreement
           (MNPA) (totaling $1.46 billion in principal); and
           2.      a Revolving Credit Facility (RCF) ($999 million in principal).
   Creditors claimed a “Make-Whole Amount” under the MNPA, and under
   both the MNPA and the RCF, they claimed interest calculated according to
   a contractually specified “default rate” on all amounts due and payable at the
   time that Ultra filed for bankruptcy.
           Under both the MNPA and the RCF, the occurrence of any
   contractually enumerated “Event of Default” renders any outstanding
   principal immediately due and payable. Under the MNPA, such an Event
   also triggers the requirement that OpCo pay Creditors an additional Make-
   Whole Amount. The Make-Whole Amount, stripped of the contract’s
   financial jargon, is simply the value of all future unmatured interest payments
   on the Notes, expressed in today’s dollars. 3
           Among the Events of Default that trigger principal acceleration and
   the Make-Whole provision is the filing of a petition for bankruptcy. Thus,
   the moment that Ultra filed, the remaining principal on both debt
   instruments became due, and Ultra contractually owed the Noteholders the
   Make-Whole Amount—a sum clocking in around $201 million.

           3
              Here is the nitty-gritty: The MNPA defines the Make-Whole Amount as “the
   excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect
   to the Called Principal of such fixed rate Note over the amount of such Called Principal.”
   The “Remaining Scheduled Payments” are the payments of interest and principal that
   would have occurred absent OpCo’s default. These payments are summed and discounted
   to their present value using a discount factor 50 basis points over the yield to maturity of
   Treasury securities comparable in risk profile to the OpCo Notes. From this figure is
   subtracted the “Called Principal”—the unpaid balance of the Notes’ principal that was
   accelerated on default. The Make-Whole Amount is any resultant positive number.

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           On top of this, both the MNPA and the RCF specified a hefty
   contractual “default rate” of interest to accrue on the accelerated principal
   and the Make-Whole Amount for so long as these amounts remained
   unpaid. 4 Since bankruptcy’s automatic stay prevents payment, this default-
   rate interest effectively accrued until plan confirmation.                    Creditors
   accordingly sought to recover $106 million in interest on the accelerated
   principal and $14 million in interest on the Make-Whole Amount.
           Ultra objected to both the Make-Whole Amount and the default-rate
   interest, which together totaled some $387 million. In its view, the Make-
   Whole Amount was either an unenforceable penalty under governing New
   York law or else impermissible “unmatured interest,” both of which are
   disallowed by the Bankruptcy Code. Ultra further urged that the interest
   accrued at the contractual default rate far exceeded the appropriate amount
   of interest, which, it contended, should be calculated at the Code’s “legal
   rate” of post-petition interest: namely, the Federal Judgment Rate. 5
           On remand from this court to decide in the first instance whether
   these disputed amounts were allowable under the Bankruptcy Code (and,
   therefore, necessary for Creditors to be deemed unimpaired), the bankruptcy
   court ruled in Creditors’ favor. In re Ultra Petroleum Corp., 624 B.R. 178,
   191–95, 202–04 (Bankr. S.D. Tex. 2020). The Make-Whole Amount, it held,
   was enforceable under New York law, and it constituted neither “unmatured
   interest” nor its “economic equivalent” for the purpose of § 502(b)(2). Id.
   at 191–95. As to post-petition interest, the bankruptcy court held that the

           4
             Both instruments defined the rate as the greater of two percent over the Notes’
   usual rate or two percent over the JPMorgan Chase prime rate.
           5
             As noted above, the applicable Federal Judgment Rate as of Ultra’s petition date
   would have been 58 basis points (0.58%), which is materially less than the contractual
   default rate of over 2%. See supra n.2.

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   historically rooted “solvent-debtor exception” to the Bankruptcy Code’s
   prohibition of unmatured interest entitled Creditors to such interest at the
   contractual default rate rather than the lower Federal Judgment Rate. Id. at
   195–204. All told, the bankruptcy court’s ruling would require Ultra to pay
   Creditors the entire $387 million that they sought. Ultra again appealed
   timely and directly to this court. 6
                                              II.
           This appeal presents pure questions of bankruptcy law, which we
   review de novo. Ultra, 943 F.3d at 762.
           We begin with the Make-Whole Amount. Because we need only
   address the solvent-debtor exception to the extent that the Bankruptcy Code
   would disallow the Make-Whole Amount, we first consider whether the
   Make-Whole Amount constitutes disallowed unmatured interest under
   11 U.S.C. § 502(b)(2). Concluding that it does, we then consider whether
   the solvent-debtor exception survived the enactment of the Bankruptcy Code
   in 1978 and thus whether it still applies to suspend the Code’s disallowance
   of the Make-Whole Amount as unmatured interest. Because the exception
   does indeed survive intact, we then consider whether the Make-Whole
   Amount is an unenforceable penalty under New York law, in which case the
   exception could not save it. But because it is enforceable under state law, we
   conclude that Ultra must pay the Make-Whole Amount as a solvent debtor.
           Finally, we turn to the rate of post-petition interest. Because, as the
   parties agree, Ultra must receive some post-petition interest to remain
   unimpaired, we must decide only which rate to apply: the contractual default

           6
             The bankruptcy court granted Ultra’s motion for certification of direct appeal,
   and this court granted Ultra’s petition for direct appeal. We therefore have jurisdiction
   over this appeal under 28 U.S.C. § 158(d)(2).

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   rate or the Federal Judgment Rate. We conclude that in this solvent-debtor
   case, the contractual default rate is appropriate. We therefore affirm.
                                                A.
           Section 502(b)(2) of the Bankruptcy Code disallows “claim[s] . . . for
   unmatured interest.” We have interpreted that provision to disallow the
   “economic equivalent of ‘unmatured interest’” as well. In re Pengo Indus.,
   Inc., 962 F.2d 543, 546 (5th Cir. 1992) (citation omitted); accord In re
   Chateaugay Corp., 961 F.2d 378, 380–81 (2d Cir. 1992). 7 Otherwise, the
   Code’s disallowance of unmatured interest would be susceptible to easy end-
   runs by canny creditors. See Pengo, 962 F.2d at 543 (refusing to allow an end-
   run around the Code’s disallowance of unmatured interest by
   recharacterizing as “principal” what is essentially interest).
           Contractual make-whole amounts, like the one at issue here, are
   expressly designed to liquidate fixed-rate lenders’ damages flowing from
   debtor default while market interest rates are lower than their contractual
   rates. Lenders’ damages equal the present value of all their future interest

           7
             See also In re Doctors Hosp. of Hyde Park, Inc., 508 B.R. 697, 705 (Bankr. N.D. Ill.
   2014) (noting that “courts look to the economic substance of the transaction to determine
   what counts as interest” and holding that a “Yield Maintenance Premium” is subject to
   § 502(b)(2) disallowance because it “serves the purpose of interest in economic reality”
   (emphases added)); In re Ridgewood Apartments of DeKalb Cnty., Ltd., 174 B.R. 712, 720–21
   (Bankr. S.D. Ohio 1994) (holding the “clear purpose [of] a prepayment penalty” to be to
   “compensate the lender for anticipated interest,” and therefore disallowing a claim for
   such); In re Pub. Serv. Co. of N.H., 114 B.R. 800, 803 (Bankr. D.N.H. 1990) (holding that,
   “in economic fact,” an original issue discount “is interest” subject to § 502(b)(2)); cf.
   Thrifty Oil Co. v. Bank of Am. Nat’l Tr. & Sav. Ass’n, 322 F.3d 1039, 1048–49 (9th Cir.
   2003) (holding that damages stemming from default on interest-rate swap cannot
   constitute “interest” under § 502(b)(2) because “[a] fundamental characteristic of an
   interest rate swap is that the counterparties never actually loan or advance the notional
   amount”); In re Hertz Corp., 637 B.R. 781, 791 (Bankr. D. Del. 2021) (adopting the
   “economic equivalent of unmatured interest” interpretation of § 502(b)(2)).

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   payments. In other words, a make-whole amount is nothing more than a
   lender’s unmatured interest, rendered in today’s dollars. See In re Energy
   Future Holdings Corp., 842 F.3d 247, 251 (3d Cir. 2016) (referring to a make-
   whole as a “contractual substitute for interest lost on [n]otes redeemed
   before their expected due date”); In re MPM Silicones, L.L.C., 874 F.3d 787,
   801 n.13 (2d Cir. 2017) (same). It is—rather precisely—the “economic
   equivalent of ‘unmatured interest.’” Pengo, 962 F.2d at 546 (citation
   omitted).
          Because the Make-Whole Amount here is the “economic equivalent”
   of a lender’s “unmatured interest,” the Code—per our circuit’s
   precedent—disallows it. See 11 U.S.C. § 501(b)(2); Pengo, 962 F.2d at 546.
   Against this straightforward syllogism, Creditors lodge an array of objections.
   None succeeds.
                                         1.
          Creditors first contend that the Make-Whole Amount is simply not
   unmatured interest: it is neither “interest” nor “unmatured” (if it were
   interest), they argue. Neither of these arguments has merit.
          Creditors rely heavily on dictionary and case law definitions of the
   term “interest.”     Interest, they say, is “consideration for the use or
   forbearance of another’s money accruing over time.” Brief for Appellee Ad
   Hoc Committee of OpCo Unsecured Creditors at 37 (quoting Ultra, 624 B.R.
   at 184). And because the Make-Whole Amount does not compensate
   Creditors for any actual “use or forbearance,” it therefore cannot be
   “interest.”
          This argument fails. Even on the terms of Creditors’ own argument,
   the Make-Whole Amount does constitute compensation for “use or
   forbearance” of Creditors’ principal—it compensates Creditors for the
   future use of their money, albeit use that will never actually occur because of

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   Ultra’s default. This is simply another way of saying that the interest is
   unmatured. And unmatured interest is still interest. 8
           Assuming arguendo that the Make-Whole Amount is interest,
   Creditors next argue that it had matured—albeit at the very moment of
   Ultra’s filing for bankruptcy. If that were so, the Make-Whole Amount
   would narrowly escape § 502(b)(2)’s gaping maw: it would be an allowable
   claim for (barely) matured interest. This argument also fails.
           The bankruptcy court correctly rejected the argument, reasoning that
   the MNPA’s acceleration provision was an ipso facto clause that is not to be
   considered in assessing whether the payment it triggered had matured.
   Ultra, 624 B.R. at 188 (citing In re ICH Corp., 230 B.R. 88, 94 (N.D. Tex.
   1999)). But, more to the point, a make-whole amount contractually triggered
   by a bankruptcy petition cannot antedate that same bankruptcy petition.
   First the petition is filed; then the make-whole amount becomes due—first
   the cause; then the effect. Thus, if it is indeed “interest,” the make-whole
   amount is also “unmatured” as of the time of filing—and therefore subject
   to § 502(b)(2) disallowance.

           8
             If we accepted Creditors’ contention that the Make-Whole Amount could not be
   “interest” because it does not compensate for the (prior) use of another’s money, then the
   term “unmatured interest” in 11 U.S.C. § 502(b)(2) would be vacuous: Until it matures,
   no “interest” compensates for the use of another’s money—it is “interest” only in an
   anticipatory sense (i.e., it will compensate for the use of another’s money when it becomes
   due). Interest is only “interest” when it matures. On Creditors’ argument, therefore,
   “unmatured interest” would be a paradox.
           Creditors also recharacterize the Make-Whole Amount as “compensat[ion] . . . for
   Ultra’s decision not to use their money.” Brief for Ad Hoc Committee of OpCo Unsecured
   Creditors at 38 (quoting Ultra, 624 B.R. at 188). But this, again, is just another way of
   saying that the Make-Whole Amount is interest—albeit future interest that will never
   mature because of Ultra’s default.

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           Let us suppose, though, that Creditors’ characterization of the Make-
   Whole Amount as something other than unmatured interest were correct.
   Their arguments would founder nonetheless. In our circuit, we evaluate
   whether a claim is disallowed under § 502(b)(2) based on whether the claim
   is for the “economic equivalent of unmatured interest”—not simply
   whether the claim is itself for “unmatured interest.” Pengo, 962 F.2d at 546.
   What matters in this context is the underlying “economic reality” of the
   thing—not dictionary definitions or formalistic labels. Id. So, to the extent
   that Creditors argue, even successfully, that the Make-Whole Amount is not
   “unmatured interest,” they are barking up the wrong tree.
                                               2.
           This brings us to Creditors’ second chief contention: Pengo did not
   mean what it said when it interpreted § 502(b)(2) to disallow claims for the
   “economic equivalent of unmatured interest.” Creditors attempt to cabin
   this controlling case to its facts. In Pengo, we held that a debt instrument with
   an “Original Issue Discount” (OID) constituted unmatured interest as a
   matter of “economic fact.” Id. In essence, an OID security disguises interest
   as principal.9 Recognizing this, we held that we must look through the labels
   assigned to claims to evaluate their underlying “economic realit[ies].” Id.;
   accord Chateaugay, 961 F.2d at 380 (“As a matter of economic definition,
   OID constitutes interest.”). And when the reality of things—the economic

           9
             Here is a simple example of how an OID works: Lender L issues Debtor D a loan
   in return for a Security S with a face value of $100. But, instead of handing over $100, L
   gives D only $90. Still, S’s principal is $100 and must be repaid over the term of the loan.
   The $10 difference between face-value principal and actual credit extended, while
   denominated “principal,” serves exactly the same purpose as interest: it compensates L
   for extending the loan.

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   fact of the matter—is that a particular claim is really just the functional
   equivalent of unmatured interest, § 502(b)(2) disallows it.
           Creditors attempt to distinguish the Make-Whole Amount at issue
   here from Pengo’s OIDs on the basis that an OID is an “assured payment,”
   whereas Creditors’ Make-Whole Amount is “contingent.” The relevance of
   this distinction, though, is hazy at best. At most, it shows that OIDs are not
   narrowly tailored liquidated damages that account for market conditions at
   the time of debtor breach. The Make-Whole Amount, meanwhile, does
   constitute well-tailored liquidated damages: it pays out only when and to the
   extent that the Creditors are actually harmed by Ultra’s breach. Yet this
   distinction does nothing to mitigate the force of Pengo’s holding: If the claim
   in question is the “economic equivalent of unmatured interest,” it is
   disallowed by § 502(b)(2).            Whether the claim also happens to be
   denominated “liquidated damages” is beside the point.                       Like interest
   masquerading as “principal,” interest labeled “liquidated damages” is still
   interest. 10

           10
               Creditors also unpersuasively urge that Pengo was really just about OIDs,
   pointing to our icing-on-the-cake argument from legislative history: the Code’s drafters
   mentioned OIDs as examples of claims disallowed under § 502(b)(2). But in Pengo, we
   prefaced our mention of this fact with: “Moreover, the legislative history verifies our
   [conclusion] . . . .” 962 F.2d at 546 (emphases added). We certainly did not suggest that
   legislative history was dispositive in Pengo, let alone that legislative history could narrow
   the scope of a statutory provision. And regardless, as we have recently said, also in
   interpreting the Bankruptcy Code, “We are reluctant to rely on legislative history for the
   simple reason that it’s not law.” In re DeBerry, 945 F.3d 943, 949 (5th Cir. 2019).

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                                          3.
          We thus arrive at Creditors’ final set of arguments. Creditors broadly
   argue that the Make-Whole Amount is not the “economic equivalent of
   unmatured interest,” but rather “liquidated damages,” as a number of
   bankruptcy courts have held. See, e.g., In re Trico Marine Servs., Inc., 450 B.R.
   474, 480 (Bankr. D. Del. 2011). They suggest that even though unmatured
   interest factors heavily into the Make-Whole Amount’s calculation, the
   figure that the formula spits out is itself something different in kind. This
   argument is untenable.
          Creditors acknowledge, as they must, that a key ingredient in the
   formula used to calculate the Make-Whole Amount is the sum of Ultra’s
   unmatured interest (and principal) future payments. Creditors posit that the
   formula somehow transmogrifies its inputs, including the key input—
   unmatured interest—into something fundamentally different on the other
   side of the equals sign. To suggest otherwise, they say, “makes no more
   sense than saying that the area of a circle constitutes π because its formula is
   πr2.” Brief for Appellee Ad Hoc Committee of OpCo Unsecured Creditors
   at 40. This argument proves far too much. Consider this formula for a
   hypothetical ‘Fake-Whole’ Amount:
                               Fake-Whole Amount =
                 (∑ [all unmatured interest payments] + $1.00) × 1
   Of course, this Fake-Whole Amount is nothing more than unmatured
   interest plus one dollar (for good measure).          Nothing transformative
   happened here. To determine whether a formula’s output bears some
   identity with any of its inputs requires looking at the formula itself. And the
   Make-Whole formula, like the Fake-Whole formula, does nothing to its
   unmatured interest component to render the result different in kind.

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         In fact, the Make-Whole Amount’s formula yields precisely the
   “economic equivalent” of Creditors’ unmatured interest. The formula
   simply accounts for the time-value of money: A dollar today is worth more
   than a dollar tomorrow. The sum of unmatured interest payments today is
   worth more than that same set of payments paid out incrementally in the
   future. To create the “economic equivalent” of that unmatured interest
   today, the sum of those payments must be discounted by a factor representing
   the appropriate reinvestment rate—what the Creditors could earn on
   comparable securities in the present market. That is exactly what the Make-
   Whole formula does. The Make-Whole Amount is exactly the “economic
   equivalent of unmatured interest.”
         Creditors protest that the Make-Whole Amount functions more like
   ordinary damages to compensate them for the transaction costs involved in
   securing a comparable loan.      Conceding that the dichotomy between
   “liquidated damages” and “unmatured interest” (or its “economic
   equivalent”) is not so airtight as their briefs generally suggest, Creditors
   acknowledge that whether a given make-whole amount is allowable or
   disallowable liquidated damages turns “on the dynamics of the individual
   case.” Brief for Appellee Ad Hoc Committee of OpCo Unsecured Creditors
   at 44, 46–47; Brief for Appellee OpCo Noteholders at 38–39; see also Ultra,
   943 F.3d at 765. And Creditors insist that this Make-Whole Amount is
   allowable liquidated damages—not disallowed unmatured interest in the form
   of liquidated damages.
         In making this argument, Creditors adopt by reference the bankruptcy
   court’s chain of reasoning below. The bankruptcy court posed a hypothetical
   involving a three-party transaction: Borrower B prepays his Loan from
   Lender L, who turns to Broker K to identify a New Borrower N who will
   accept a New Loan identical to B’s original Loan. But to find N and secure
   the loan at the same rate, K charges L a fee of 2%, which B must pay L in

                                        14
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                                           No. 21-20008

   damages for prepayment. Would that 2% fee constitute unmatured interest?
   No, the court said, it is just the “negotiated cost to compensate the lender
   for making a new loan on comparable terms in a changed market.” Ultra,
   624 B.R. at 190. “The hypothetical is no different than the Make-Whole at
   issue here.” Id.
           But it is different. The relevant consideration is whether the make-
   whole amount merely compensates the borrower for the search and
   transaction costs of “seek[ing] to find someone else to use the capital,” or
   goes further and compensates creditors for the loss of future interest
   “through the guise of a make-whole premium.” Douglas G. Baird, Elements
   of Bankruptcy 84–85 (6th ed. 2014). 11 The bankruptcy court’s helpful
   hypothetical illustrates the fact that there is non-overlapping space in the
   Venn Diagram between liquidated damages and unmatured interest.
   Liquidated damages certainly can compensate for anticipated transaction
   costs that are not unmatured interest. But the Make-Whole Amount, unlike
   the transaction-costs liquidated damages in the hypothetical, is both
   liquidated damages and the “economic equivalent of unmatured interest”—
   indeed, that is its whole point. 12

           11
             See Hertz, 637 B.R. at 791 (“If it were enough to just label a make-whole claim
   liquidated damages . . . , then a contract providing that on default or redemption ‘all
   unmatured interest’ would be immediately due and payable could avoid the effect of section
   502(b)(2) completely.”).
           12
               But see generally Douglas G. Baird, Making Sense of Make-Wholes, 94 Am. Bankr.
   L.J. 567, 580 (2020) (“When a make-whole clause represents the parties’ good faith
   estimate of the loss of a favorable rate of interest, it is merely serving as a liquidated
   damages clause, and bankruptcy judges should enforce it for the same reason judges enforce
   such clauses outside of bankruptcy.”). Professor Baird eloquently argues that a claim for
   the difference between a fixed and floating interest rate does not necessarily constitute
   unmatured interest. Id. at 579–580 (“An obligation owed on a bad bet—involving changes
   in the rate of interest or anything else—is not in and of itself an obligation to pay unmatured
   interest.”); but cf. Thrifty Oil Co., 322 F.3d at 1048–49 (implying, in a case involving

                                                 15
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                                              B.
           Although we have concluded that Creditors’ claim for the Make-
   Whole Amount is indeed a claim for unmatured interest or its economic
   equivalent as disallowed under 11 U.S.C. § 502(b)(2), we are not done. We
   must evaluate whether the solvent-debtor exception survived the Bankruptcy
   Code’s enactment and applies to this case. We conclude that it does. For
   this reason, Ultra must pay the Make-Whole Amount.
           In the ordinary case, the Bankruptcy Code would disallow a make-
   whole amount that functionally equates to unmatured interest. But this is not
   the ordinary case. Ultra became ultra solvent. And when a debtor is able to
   pay its valid contractual debts, traditional doctrine says it should—
   bankruptcy rules notwithstanding.
           We begin with history, tracing the English provenance of the solvent-
   debtor exception, and its incorporation into American bankruptcy law. We
   then examine Ultra’s contention that the 1978 Bankruptcy Code abrogated
   the traditional exception. Although it is a close call, the Supreme Court has
   instructed us not to infer abrogation of traditional bankruptcy practice.

   interest-rate swaps, that such a claim is not “interest” only when “no advance of money
   has occurred between the . . . counterparties” with respect to that claim—i.e., when there
   is no principal). Professor Baird makes the case that make-whole amounts in a variable
   interest-rate environment are different in kind than sums of unmatured fixed-rate interest
   in a stable interest-rate market. He concludes that it comports with longstanding
   bankruptcy principles and policy to allow claims for make-whole amounts.
            Be that as it may, the Code as interpreted by this circuit’s binding precedent
   disallows the “economic equivalent of unmatured interest.” Pengo, 962 F.2d at 546. And,
   as discussed above, Creditors’ Make-Whole Amount represents the economic equivalent
   of interest that had not matured as of the petition date, even though it also constitutes
   liquidated damages. The conclusion inexorably follows that the Make-Whole Amount
   must be disallowed under current law, even though policy considerations may favor
   allowance.

                                              16
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                                    No. 21-20008

   Because the Code’s general bar on claims for unmatured interest does not
   specifically address the solvent-debtor scenario, for which traditional
   bankruptcy practice has always provided an exception, we conclude that the
   pre-Code doctrine concerning solvent debtors’ obligations remains good law,
   and the exception operates in this case to suspend § 502(b)(2)’s disallowance
   of Creditors’ Make-Whole Amount.
                                         1.
          For some three centuries of bankruptcy law, courts have held that an
   equitable exception to the usual rules applies in the unusual case of a solvent
   debtor. When a debtor proves solvent—that is, when the debtor’s assets
   exceed its liabilities—bankruptcy’s ordinary suspension of post-petition
   interest is itself suspended. When a debtor can pay its creditors interest on
   its unpaid obligations in keeping with the valid terms of their contract, it
   must. Am. Iron & Steel Mfg. Co. v. Seaboard Air Line Ry., 233 U.S. 261, 266
   (1914) (“[I]f, as a result of good fortune or good management, the [debtor’s]
   estate prove[s] sufficient to discharge the claims in full, interest as well as
   principal should be paid.”); see also Debentureholders Protective Comm. of
   Cont’l Inv. Corp. v. Cont’l Inv. Corp., 679 F.2d 264, 269 (1st Cir. 1982)
   (“Where the debtor is solvent, the bankruptcy rule is that where there is a
   contractual provision, valid under state law, providing for interest on unpaid
   instalments of interest, the bankruptcy court will enforce the contractual
   provision with respect to both instalments due before and . . . after the
   petition was filed.” (emphasis added)).
          As with many of our bankruptcy rules, this doctrine originated in
   eighteenth-century English practice.            See 2 William Blackstone,
   Commentaries *488 (“[T]hough the usual rule is, that all interest on debts
   carrying interest shall cease from the time of issuing the commission, yet, in
   case of a surplus left after payment of every debt, such interest shall again

                                         17
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                                           No. 21-20008

   revive, and be chargeable on the bankrupt . . . .”); see also, e.g., Bromley v.
   Goodere (1743) 26 Eng. Rep. 49, 52; 1 Atk. 75, 80 (“[S]uppos[ing] . . . there
   should be a surplus, it would be absurd to say the creditors should not have
   interest . . . .”); Ex parte Rooke (1753) 26 Eng. Rep. 156, 157; 1 Atk. 244, 245
   (ordering solvent bankruptcy petitioner “to pay the principal and interest . . .
   to all his creditors” (emphasis added)). 13
           Our forebears adopted English practice in our nation’s nascent
   nineteenth-century bankruptcy system. See Sexton v. Dreyfus, 219 U.S. 339,
   344 (1911) (Holmes, J.) (“We take our bankruptcy system from England, and
   we naturally assume that the fundamental principles upon which it was
   administered were adopted by us when we copied the system . . . .”); 14 see
   also Debentureholders, 679 F.2d at 269 (referring to “the settled English and
   American law that when an alleged bankrupt is proved solvent, the creditors
   are entitled to receive post-petition interest before any surplus reverts to the
   debtor”). And as the Supreme Court has said, the English solvent-debtor
   exception “ha[s] been carried over into our system.” City of New York v.

           13
              See also, e.g., Ex parte Mills (1793) 30 Eng. Rep. 640, 644; 2 Ves. Jun. 294, 303
   (ordering payment of “interest upon [the solvent bankrupt’s] debts, as either upon the face
   of the security or by force of the contract between the parties carry interest”); Bankruptcy
   Act of 1825, 6 Geo. 4 c. 16, § 132 (codifying the doctrine that “all Creditors whose Debts
   are now by Law entitled to carry Interest, in the Event of a Surplus, shall first receive
   Interest on such Debts . . . .”); cf. Ex parte Marlar (1746) 26 Eng. Rep. 97, 98; 1 Atk. 150,
   152 (stating the rule in solvent-debtor cases “that note-creditors have no right to prove
   interest upon them, unless it is expressed in the body of the notes”); Ex parte Williams.—In the
   Matter of Wilcocks, 1 Cases in Bankruptcy 399, 399 (George Rose ed. 1813) (“Where there
   is a Surplus of the Bankrupt’s Estate, Creditors are not entitled to Interest upon Debts,
   unless it has been provided for by Contract, either express, or implied . . . .” (emphasis
   added)).
           14
             But see Sloan v. Lewis, 89 U.S. 150, 157 (1874) (“The English cases referred to in
   the argument, in our opinion, have no application here. They are founded upon the English
   statutes and the established practice under them. Our statute is different in its provisions
   and requires, as we think, a different practice.”)

                                                 18
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                                          No. 21-20008

   Saper, 336 U.S. 328, 330 n.7 (1949); see also United States v. Ron Pair Enters.,
   Inc., 489 U.S. 235, 246 (1989) (noting the solvent-debtor exception’s
   “recogni[tion] under pre-Code [American] practice”).
           The reason for this traditional, judicially-crafted exception is
   straightforward: Solvent debtors are, by definition, able to pay their debts in
   full on their contractual terms, and absent a legitimate bankruptcy reason to
   the contrary, they should. Unlike the typical insolvent bankrupt, a solvent
   debtor’s pie is large enough for every creditor to have his full slice. With an
   insolvent debtor, halting contractual interest from accruing serves the
   legitimate bankruptcy interest of equitably distributing a limited pie among
   competing creditors as of the time of the debtor’s filing. See Am. Iron & Steel,
   233 U.S. at 266. 15 With a solvent debtor, that legitimate bankruptcy interest
   is not present. 16 See In re Chicago, Milwaukee, St. Paul & Pac. R.R. Co., 791
   F.2d 524, 527–28 (7th Cir. 1986) (Posner, J.) (“The only good reason for
   refusing to give a creditor in reorganization all that he bargained for when he
   extended credit is to help other creditors, the debtor’s assets being
   insufficient to pay all creditors in full . . . . [But] if the bankrupt is solvent the

           15
              See also Thomas H. Jackson & Robert E. Scott, On the Nature of Bankruptcy: An
   Essay on Bankruptcy Sharing and the Creditors’ Bargain, 75 Va. L. Rev. 155, 155 (1989)
   (“[P]rebankruptcy entitlements should be impaired in bankruptcy only when necessary to
   maximize net asset distributions to the creditors as a group . . . .”); Ginsburg & Martin on
   Bankruptcy § 1.01 (6th ed. 2022) (noting that the primary goal of United States bankruptcy
   law is to “promote equality of distribution among similarly situated creditors” from a
   limited estate).
           16
              There exists a gray area, however, where a debtor is solvent enough to pay in full
   all allowed claims, but the surplus is not enough to cover all creditors’ otherwise disallowed
   interest. In such a case, legitimate bankruptcy interests may well warrant a more nuanced
   application of the solvent-debtor exception. See Scott C. Shelley & Solomon J. Noh, Show
   Me the Money: Another Look at Postpetition Interest in Solvent Debtor Chapter 11 Cases, 24
   Emory Bankr. Dev. J. 361, 370–71 (2008). But that situation is not present here, so we need
   not address it.

                                                19
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                                           No. 21-20008

   task for the bankruptcy court is simply to enforce creditors’ rights according
   to the tenor of the contracts that created those rights . . . .”). Therefore,
   solvent debtors should be exempted from the general rule disallowing
   unmatured interest from accruing post-petition, and this “solvent-debtor
   exception” simply follows from the first principles of bankruptcy law.
                                                 2.
           In the face of the solvent-debtor exception’s historical provenance and
   comportment with bankruptcy’s fundamental principles, Ultra argues that
   Congress nonetheless abrogated it in enacting the 1978 Bankruptcy Code.
   The Code’s straightforward disallowance of claims for unmatured interest in
   § 502(b)(2) does not distinguish solvent and insolvent debtors. Ultra cites a
   string of bankruptcy court opinions and two circuit cases for the proposition
   that § 502(b)(2) applies regardless of debtor solvency. Brief for Appellants
   at 26 (citing, inter alia, In re Gencarelli, 501 F.3d 1 (1st Cir. 2007) and In re
   Dow Corning Corp., 456 F.3d 668 (6th Cir. 2006)). 17 Ultra further urges the
   court to draw negative implications from the Code’s provision for impaired
   creditors to receive interest at “the legal rate” when a debtor proves
   sufficiently solvent.        See 11 U.S.C. §§ 726(a)(5), 1129(a)(7)(A)(ii).                 If
   Congress provided for interest in this circumstance but said nothing else

           17
             See also In re Ancona, No. 14-10532, 2016 WL 828099, at *6 (Bankr. S.D.N.Y.
   Mar. 2, 2016) (rejecting “the proposition that a court must first find a debtor to be insolvent
   or determine all other claims against a debtor before analyzing a [§ 502(b)(6)] claim”); In
   re Flanigan, 374 B.R. 568, 575 (Bankr. W.D. Pa. 2007) (same); In re Farley, Inc., 146 B.R.
   739, 747–48 (Bankr. N.D. Ill. 1992) (same); In re Federated Dep’t Stores, Inc., 131 B.R. 808,
   817 (S.D. Ohio 1991) (same); In re PPI Enters. (U.S.), Inc., 228 B.R. 339, 345–46 (Bankr. D.
   Del. 1998); HSBC Bank USA, Nat’l Ass’n v. Calpine Corp., No. 07-CIV-3088, 2010 WL
   3835200, at *5, *10 (S.D.N.Y. Sept. 15, 2010) (applying § 502(b)(2) in a “very solvent”
   debtor case).

                                                 20
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                                           No. 21-20008

   about solvent debtors generally, no broader exception should be inferred—
   expressio unius est exclusio alterius.
           Creditors respond with equal and opposite force. Under American
   bankruptcy statutes in place from the late nineteenth century through much
   of the twentieth century, claims for unmatured interest were expressly
   disallowed; nevertheless, courts regularly applied the solvent-debtor
   exception. See Bankruptcy Act of 1898, Pub. L. No. 55-541, § 63, 30 Stat.
   544, 563 (1898) (limiting interest on provable claims to interest “which
   would have been recoverable” when the petition was filed, and subtracting
   “interests accrued after the filing of the petition” (emphasis added));
   Bankruptcy Act of 1938 (Chandler Act), Pub. L. No. 75-696, § 63, 52 Stat.
   840, 873 (1938) (same); see, e.g., Johnson v. Norris, 190 F. 459, 461–65 (5th
   Cir. 1911) (concluding that § 63 of the Bankruptcy Act “was not intended to
   be applied to a solvent estate”); Ruskin v. Griffiths, 269 F.2d 827, 829–32 (2d
   Cir. 1959) (awarding post-default interest on overdue interest and
   accelerated principal at a heightened contractual rate because the debtor was
   solvent, despite the then-applicable bankruptcy acts’ preclusion of
   unmatured interest); cf. Saper, 336 U.S. at 330–32, 330 n.7 (acknowledging
   American adoption and retention of the solvent-debtor exception in our
   nation’s bankruptcy practice, even after the Bankruptcy Act of 1898 and the
   1938 Chandler Amendments codified the “long-standing rule against post-
   bankruptcy interest”). 18

           18
              See also, e.g., Brown v. Leo, 34 F.2d 127, 127 (2d Cir. 1929) (recognizing that § 63
   of the 1898 Bankruptcy Act fixes “the time when interest stops . . . as the date of the filing
   of the petition,” but noting that the estate at issue there was solvent, so “neither the rule
   nor the reason for stopping interest at the date of the filing of the petition applies”); Sword
   Line, Inc. v. Indus. Comm’r of N.Y., 212 F.2d 865, 870 (2d Cir. 1954) (“[I]nterest ceases
   upon bankruptcy in the general and usual instances noted . . . unless the bankruptcy bar
   proves eventually nonexistent by reason of the actual solvency of the debtor.”); Littleton v.
   Kincaid, 179 F.2d 848, 852 (4th Cir. 1950) (“[W]hen this unusual event [i.e., debtor

                                                 21
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                                         No. 21-20008

           This historical bankruptcy practice, Creditors argue, demonstrates
   that Congressional recodification of the Bankruptcy Act’s § 63 disallowance
   of unmatured interest in § 502(b)(2) of the 1978 Bankruptcy Code did not
   expressly abrogate the solvent-debtor exception. If Congress legislated
   cognizant of courts’ practice of excepting solvent debtors from the generally
   applicable statutory disallowance of § 63, one would expect it to have
   expressly abrogated the judicial exception if it intended to do so.
                                               3.
           The parties’ competing arguments center on how we expect Congress
   to draft statutes and, specifically, what we are to make of congressional
   silence. Ultra assumes, not unreasonably, that Congress means what it says
   and that, when Congress says one thing but not another, it means to exclude
   what it did not say. Creditors, meanwhile, assume that Congress legislates
   against a historical backdrop, and that when courts historically have
   fashioned an exception to a clear statutory provision, Congress is presumed
   to accept that practice unless it expressly says otherwise. These equally
   sensible presumptions are at loggerheads.
           The Supreme Court breaks the tie. We must defer to prior bankruptcy
   practice unless expressly abrogated. The Court has endorsed a substantive
   canon of interpretation regarding the Bankruptcy Code vis-à-vis preexisting
   bankruptcy doctrine. Namely, abrogation of a prior bankruptcy practice
   generally requires an “unmistakably clear” statement on the part of

   solvency in bankruptcy] occurs interest is payable out of this surplus to the date of
   payment.”); In re Magnus Harmonica Corp., 159 F. Supp. 778, 780 (D.N.J. 1958)
   (enumerating as an explicit, judicially devised exception to § 63 of the Bankruptcy Act that
   “[w]here the estate of the debtor is sufficient to pay all of his debts, including interest,
   interest may be allowed to the date of payment”), aff’d, 262 F.2d 515 (3d Cir. 1959); In re
   Int’l Hydro-Elec. Sys., 101 F. Supp. 222, 224 (D. Mass. 1951) (holding a debtor’s solvency
   dispositive in awarding creditors contractual default-rate interest).

                                               22
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                                         No. 21-20008

   Congress; any ambiguity will be construed in favor of prior practice. Cohen
   v. de la Cruz, 523 U.S. 213, 221–22 (1998) (stating that courts should “not
   read the Bankruptcy Code to erode past bankruptcy practice absent a clear
   indication that Congress intended such a departure” (quoting Pa. Dep’t of
   Pub. Welfare v. Davenport, 495 U.S. 552, 563 (1990))); Midlantic Nat’l Bank
   v. N.J. Dep’t of Envt’l Prot., 474 U.S. 494, 501 (1986) (indicating that the
   “normal rule of statutory construction” that courts “follow[] with particular
   care” in interpreting the Code is that “if Congress intends for legislation to
   change the interpretation of a judicially created concept, it makes that intent
   specific”); Kelly v. Robinson, 479 U.S. 36, 46, 53 (1986) (noting that
   “Congress enacted the Code in 1978 against the background of an established
   judicial exception . . . created in the face of a statute drafted with considerable
   care and specificity” and finding no “significant evidence that Congress
   intended to change the law”); see also Dewsnup v. Timm, 502 U.S. 410, 419–
   20 (1992) (concluding that it is “not plausible” “to attribute to Congress the
   intention” to act “contrary to basic bankruptcy principles” “without . . .
   mention[ing] [it] somewhere in the Code itself”). 19
           The provisions of the 1978 Bankruptcy Code do not clear this high
   hurdle. As the bankruptcy court explained, “Absent clear Congressional
   intent, provisions of the Bankruptcy Code did not abrogate universally
   recognized legal principles under the Bankruptcy Act. Nothing . . . suggests
   that Congress intended to defang the solvent-debtor exception.” Ultra, 624
   B.R. at 198 (citation omitted) (emphasis added). We agree.

           19
            We have followed the Supreme Court’s lead and held similarly. See In re
   Bodenheimer, Jones, Szwak, & Winchell L.L.P., 592 F.3d 664, 673–74 (5th Cir. 2009) (stating
   the rule that pre-Code bankruptcy doctrines “remain controlling unless explicitly
   superseded” (emphasis added)); In re Laymon, 958 F.2d 72, 74–75 (5th Cir. 1992) (similar).
   These precedents also bind us.

                                               23
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                                          No. 21-20008

           The Code’s most relevant section, § 502(b)(2), tersely recodified § 63
   of the preceding Chandler Act (and the 1898 Bankruptcy Act before it): It
   simply states that bankruptcy courts “shall allow [a] claim . . . except to the
   extent that,” among other things, “such claim is for unmatured interest.”
   But this affords no greater clarity than the 1898 and 1938 Acts, which
   similarly limited claims for interest to what “would have been recoverable
   at” the date the bankruptcy petition was filed—i.e., matured interest. § 63,
   30 Stat. at 562–63; § 63, 52 Stat. at 873; 20 see also Ultra, 624 B.R. at 197 (“The
   Bankruptcy Act’s treatment of unmatured interest was nearly identical to §
   502(b)(2).”).
           Importantly, the text of these pre-Code bankruptcy acts did not stop
   courts from applying the traditional solvent-debtor exception. 21 In 1911, our
   court was called upon to determine whether the solvent-debtor exception
   survived enactment of the original Bankruptcy Act of 1898. Johnson, 190 F.
   at 461. The debtors in that case, like the debtors here, were solvent. Pointing
   to the Bankruptcy Act’s bar against claims for interest other than what
   “could have been recoverable” on the date the bankruptcy petition was filed,
   the debtors argued that they were shielded from claims for unmatured
   interest despite their solvency. Id. at 461. In rejecting the debtors’ argument,
   we cited longstanding bankruptcy law principles to conclude that the
   Bankruptcy Act’s bar on unmatured interest simply “was not intended to be

           20
                The Chandler Act reenacted this provision verbatim.
           21
              For this reason, this is not a case in which “the language of the Code leaves no
   room for clarification by pre-Code practice.” Hartford Underwriters Ins. Co. v. Union
   Planters Bank, N.A., 530 U.S. 1, 11 (2000). This is not a case in which pre-Code practice
   comported with prior acts’ text or clarified an open-ended ambiguity therein; this is a case
   involving a plain judicial exception to the prior acts. Cf. id. at 9–11. Because Congress was
   not writing upon a clean slate, we are to assume that the legislature was aware of courts’
   equitable exception to the prior acts’ text. Had Congress intended to do away with this
   practice, it would have said so directly.

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                                         No. 21-20008

   applied to the case of a solvent estate.” 22 Id. at 462. See also Ultra, 624 B.R.
   at 196–98 (noting that this court “squarely held [in Johnson] that creditors of
   a solvent debtor may recover post-petition interest, notwithstanding the plain
   text of § 63 of the Bankruptcy Act,” and that our sister circuits did likewise
   (emphasis added)); supra n.18.
           The problem for the debtors in Johnson was not, as the dissenting
   opinion suggests, that the Bankruptcy Act was insufficiently explicit in its
   exclusion of claims for unmatured interest. The problem was that the
   Bankruptcy Act was insufficiently explicit about applying this general
   exclusion in solvent-debtor cases. Cf. United States v. Texas, 507 U.S. 529,
   534 (1993) (“In order to abrogate a common law principle, the statute must
   ‘speak directly’ to the question addressed by the common law.”(citation
   omitted)). That is why Johnson held that the traditional rule would continue
   to apply absent an “express provision . . . allowing interest that accrues after
   the filing of the petition to be paid out of a surplus . . . to the bankrupt.” 190
   F. at 463. The Bankruptcy Code, like its predecessors, did not give us that.
           Ultra complains that this manner of statutory interpretation, which
   allows judicial practice to override otherwise clear statutory text, is taken
   from a “time capsule.” But as the Creditor Committee Appellees have
   pointed out, this mode of statutory interpretation is alive and well. Indeed,
   the Supreme Court very recently applied an analogous interpretive approach
   in the patent law context. See Minerva Surgical, Inc. v. Hologic, Inc., 141 S. Ct.
   2298, 2307–08 (2021) (noting that the Patent Act of 1952 has “similar

           22
              Discussing Johnson, the bankruptcy court persuasively observed that unchanged
   “[e]quitable considerations support the solvent-debtor exception.” Ultra, 624 B.R. at 198.
   “There is no reason why Congress would allow solvent debtors to wield bankruptcy as a
   sword to slash valid debts”—an “observation [that] applies as persuasively to Congress[’s]
   deliberation of the Bankruptcy Code as it did to deliberations of the Bankruptcy Act.” Id.
   at 199.

                                              25
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                                           No. 21-20008

   language” to its precursor statute against which the judicial exception of
   assignor estoppel developed, thus suggesting that that language did not
   evince sufficiently plain Congressional intent to abrogate the doctrine). We
   are at no greater liberty to disregard the Supreme Court’s instructions in the
   bankruptcy context than we are in the patent domain. We remain bound by
   the substantive canon of Bankruptcy Code interpretation embraced in Cohen,
   Midlantic, and Kelly.
           Congress has not explicitly addressed claims for unmatured interest
   owed by solvent debtors. Nonetheless, statutory language may carry crucial
   context. See generally Antonin Scalia, Common-Law Courts in a Civil-Law
   System: The Role of United States Federal Courts in Interpreting the Constitution
   and Laws, in A MATTER OF INTERPRETATION: FEDERAL COURTS AND THE
   LAW 3, 24 (new ed. 2018) (explaining why “the good textualist is not a
   literalist”). And here, that context is the backdrop of traditional bankruptcy
   practice. The Supreme Court has dictated that we presume Congress did not
   mean to abrogate traditional bankruptcy practice “absent a clear indication
   that Congress intended such a departure.”                     Cohen, 523 U.S. at 221.
   Considered in the context of what came before, the text of § 502(b)(2) hardly
   constitutes an unambiguous—let alone explicit—change in bankruptcy
   practice. 23 See Dewsnup, 502 U.S. at 419–20; Bodenheimer, 592 F.3d at 673–

           23
               Ultra also argues that the Code’s reticulated scheme already contemplates
   solvent-debtor scenarios but declines to embrace the full scope of the traditional solvent-
   debtor exception. This, we are told, gives rise to the negative implication that Congress
   did not intend the broad solvent-debtor exception to survive the Code’s enactment.
   Specifically, because the Code provides that impaired creditors of solvent debtors are to
   receive interest at least “at the legal rate” under the best-interests-of-creditors test, see 11
   U.S.C. §§ 726(a)(5), 1129(a)(7)(A)(ii), we are to infer that Congress intended to abrogate
   the traditional solvent-debtor exception and replace it with a narrower version that requires
   payment of post-petition interest only at the Federal Judgment Rate. Thus, Ultra tells us,
   we should not overstep Congress’s specific instructions and apply the solvent-debtor
   exception to award default-rate contractual interest, despite Ultra’s solvency.

                                                 26
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                                          No. 21-20008

   74. Accordingly, we hold that the Code did not abrogate the longstanding
   judicial exception for cases involving solvent debtors. We thus hold that the
   solvent-debtor exception is alive and well. The 1978 Code’s disallowance of
   unmatured interest did not abrogate the exception with “unmistakable”
   clarity. Cohen, 523 U.S. at 221–22. Because Ultra was solvent—indeed,
   “massively” solvent—the solvent-debtor exception plainly applies in this
   case. For that reason, Ultra must pay Creditors the contractual Make-Whole
   Amount—even though, as we have already determined, see supra section
   II.A., it is indeed otherwise disallowed unmatured interest.
                                                C.
           We are not done quite yet. We have determined that the Make-Whole
   Amount is unmatured interest, and therefore, that it is disallowed under the
   Code. We have also determined, however, that the solvent-debtor exception
   survived the Code’s enactment and applies to this case. But the solvent-
   debtor exception only ensures that solvent debtors make good on their valid
   contractual obligations. So Ultra argues, in the alternative, that the Make-
   Whole Amount is an unenforceable penalty under governing state law. If that
   were so, the Bankruptcy Code would still disallow it—the solvent-debtor
   exception notwithstanding. We conclude, though, that the Make-Whole
   Amount constitutes enforceable liquidated damages under New York law.

           We are not persuaded. Sections 726(a)(5) and 1129(a)(7)(A)(ii) do not
   unambiguously abrogate or constrict the traditional solvent-debtor exception. Indeed,
   authorizing “[post-petition] interest at the legal rate . . . on any claim” in solvent-debtor
   cases does not constitute any sort of exception to the Code’s disallowance of “unmatured
   interest” as part of a claim, see id. § 726(a)(5) (emphasis added), § 502(b)(2), so those
   provisions cannot be said to supplant the traditional solvent-debtor exception. If anything,
   § 726(a)(5) arguably expands the scope of the traditional English solvent-debtor exception,
   which seems to have allowed for ongoing interest just as part of (rather than “on”)
   creditors’ claims in solvent-debtor scenarios. See, e.g., Rooke, 26 Eng. Rep. at 157; Marlar,
   26 Eng. Rep. at 98; supra n.13 and accompanying text.

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   Therefore, the solvent-debtor exception continues to apply, and Ultra must
   keep its contractual promise.
          Section 502(b)(1) of the Bankruptcy Code disallows “claim[s] [that
   are] unenforceable against the debtor . . . under any agreement or applicable
   law.” The MNPA is governed by New York law. If New York law would
   prohibit enforcement of the Make-Whole Amount as an unenforceable
   penalty, the Code would not allow it as a claim, and the solvent-debtor
   exception could not resuscitate it.
          We turn then to New York contract law. As the “party seeking to
   avoid liquidated damages,” Ultra bears the burden of showing that the Make-
   Whole Amount is “in fact, a penalty.” JMD Holding Corp. v. Cong. Fin.
   Corp., 828 N.E.2d 604, 609 (N.Y. 2005). To do so, Ultra must show that the
   “amount fixed is plainly or grossly disproportionate to the probable loss”
   incurred by Noteholder Creditors as a result of default. Id. (quoting Truck
   Rent-A-Ctr., Inc. v. Puritan Farms 2nd, Inc., 361 N.E.2d 1015, 1018 (N.Y.
   1977)). Showing that the Make-Whole Amount effectively grants double
   recovery would meet that test under New York law. See, e.g., 172 Van Duzer
   Realty Corp. v. Globe Alumni Student Assistance Ass’n Inc., 25 N.E.3d 952, 957
   (N.Y. 2014).
          Ultra asserts the Make-Whole Amount to be unreasonably
   disproportionate and thus an unenforceable penalty because it allows for
   double recovery. The alleged double recovery stems from the fact that the
   MNPA “allows the Noteholders to charge ongoing interest on the
   accelerated principal at a ‘default’ rate.” Brief for Appellants at 34. Since
   Creditors already get contractual interest on the accelerated principal, the
   argument goes, the Make-Whole Amount, which compensates Noteholder
   Creditors for the future interest payments that would have been made on the
   same accelerated principal, gives Creditors double recovery.

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           This argument withers under scrutiny. The Make-Whole Amount
   and the post-petition interest address two different harms. Ultra, 575 B.R. at
   370–71. 24    The Make-Whole Amount serves as liquidated damages for
   Ultra’s breach; the post-petition interest compensates for Ultra’s lag in
   paying the accelerated principal (and the Make-Whole itself), which were
   already due and payable for the duration of the bankruptcy. Separate harms
   warrant separate recoveries; accordingly, the Make-Whole Amount is not
   unenforceable on this theory.
           Absent any other alternative theory to show that the Make-Whole
   Amount is unreasonably disproportionate, Ultra fails to meet its burden.
   JMD Holding, 828 N.E.2d at 609. The Make-Whole Amount is enforceable
   under New York law; therefore, § 502(b)(1) does not stand in the way of the
   solvent-debtor exception.
                                               D.
           We turn, finally, to post-petition interest.              Ultra concedes that
   Creditors are entitled to some post-petition interest on their claims to
   compensate for the duration of the bankruptcy proceedings. But Ultra insists
   that the appropriate rate is the Federal Judgment Rate specified at 28 U.S.C.
   § 1961(a)—not the parties’ much higher contractual default rate. 25 And
   Ultra reiterates that the solvent-debtor exception does not apply to suspend
   that rule’s application here. We conclude that the contractual default rate is
   appropriate here.

           24
             The bankruptcy court’s first opinion in this case also provides a nice illustration
   that mathematically demonstrates how charging default-rate interest on the unpaid Make-
   Whole Amount does not result in any double recovery. Ultra, 575 B.R. at 371–72.
           25
               Recall that the difference is rather material: the applicable Federal Judgment
   Rate would be only 54 basis points; the contractual default rate, meanwhile, would be the
   greater of 2% over either of two benchmark rates. See supra note 2.

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          Ultra recognizes, as it must, that unsecured creditors of solvent
   debtors are entitled to post-petition interest on their claims if they are to be
   deemed unimpaired. See In re New Valley Corp., 168 B.R. 73, 81 (Bankr.
   D.N.J. 1994) (holding that “a solvent debtor is not required to pay
   postpetition interest on claims of unsecured creditors who are unimpaired”);
   Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 213(d), 108 Stat.
   4106, 4125–26 (overruling New Valley by repealing 11 U.S.C. § 1124(3)
   (1988), and, in effect, requiring payment of post-petition interest in order for
   unsecured creditors to be unimpaired); see also In re PPI Enterprises (U.S.),
   Inc., 324 F.3d 197, 205–07 (3d Cir. 2003) (recognizing and explaining New
   Valley’s statutory abrogation). Ultra asserts, though, that post-petition
   interest is to be calculated at the Federal Judgment Rate, “no more and no
   less.” Brief for Appellants at 43.
          Ultra’s argument depends on a series of statutory inferences. For a
   plan to be confirmed, creditors must either be unimpaired (and therefore
   “conclusively presumed to have accepted the plan,” 11 U.S.C. § 1126(f)), or
   impaired but either (1) voting in favor of the plan, see id. § 1129(a)(7)(A)(i),
   or (2) no worse off than they would be in a chapter 7 liquidation, see id.
   § 1129(a)(7)(A)(ii). Creditors are presumed “impaired under a plan unless
   . . . the plan leaves unaltered the[ir] legal, equitable, and contractual rights.”
   Id. § 1124(1). If, therefore, creditors are deemed “unimpaired,” § 1124
   necessarily requires that their “legal, equitable, and contractual rights”
   remain “unaltered.” And per Congress’s statutory overruling of New Valley
   noted above, that entails provision for post-petition interest.
          The question remains: how much? As to unimpaired creditors, the
   Code does not itself say. So Ultra turns to what it says about impaired
   creditors. It is reasonable, after all, to infer that creditors who are unimpaired
   (as Creditors here are stipulated to be) cannot be treated any worse than
   impaired creditors, who at least get to vote on the plan.

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           The Code provides that a bankruptcy court can “cram down” a plan
   on impaired creditors, over their objection, if they “will receive or retain
   under the plan . . . not less than the amount that [they] would so receive or
   retain if the debtor were liquidated under chapter 7.” Id. § 1129(a)(7)(A)(ii).
   In turn, what the creditors would get if the debtor were liquidated is specified
   in § 726(a). Section 726(a) provides a waterfall for the distribution of a
   debtor’s assets in a Chapter 7 liquidation. Before a solvent debtor’s equity
   holders get any of the estate’s leftovers, § 726(a)(5) says that creditors are to
   be paid interest on their claims “at the legal rate” from the petition date.
           Ultra hangs its hat on these words. The “legal rate,” it insists, must
   be the Federal Judgment Rate. Ultra cites and deploys many of the same
   arguments propounded in a Ninth Circuit case, In re Cardelucci, 285 F.3d
   1231 (9th Cir. 2002). For instance, the definite article “the” that precedes
   “legal rate” in § 726(a)(5) indicates that the rate is singular and not
   variable—and the only reasonable single rate under federal law is the Federal
   Judgment Rate. Id. at 1234. And, as our sister circuit suggests, “the
   commonly understood meaning of ‘at the legal rate’ at the time the
   Bankruptcy Code was enacted was a rate fixed by statute”—and the Federal
   Judgment Rate is the most likely candidate. Id. at 1234–35. This conclusion,
   Ultra and the Cardelucci court continue, advances the bankruptcy system’s
   interests in “ensur[ing] equitable treatment of creditors” by compensating
   them all at the same rate for the same duration of bankruptcy proceedings,
   and, happily, it is eminently administrable. Id. at 1235–36. 26

           26
              Still, one might well wonder why Congress did not simply cross-reference the
   statutory provision designating the Federal Judgment Rate, 28 U.S.C. § 1961, if indeed it
   meant for that to be that single rate applied. Indeed, in antitrust legislation passed just a
   few years after the Bankruptcy Code’s enactment, Congress did just that. See Pub. L. No.
   98-462, § 4(a), 98 Stat. 1815 (1984) (providing for “interest calculated at the rate specified
   in section 1961 of title 28, United States Code”); see also, e.g., 28 U.S.C. § 2412(f)

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           We do not quarrel with the Cardelucci court’s sensible reasoning, but
   neither must we decide the matter. The precise referent of “the legal rate”
   is not dispositive here. Why? Because Ultra overlooks the logically prior
   textual fact that “the legal rate” only sets a floor—not a ceiling—for what an
   impaired (and by implication, unimpaired) creditor is to receive in a cram-
   down scenario. Specifically, the Code provides that objecting, impaired
   creditors must receive “not less than” what they would receive in a Chapter
   7 liquidation—including “interest at the legal rate” per § 726(a)(5)—in
   order for the plan to be “crammed down” on them.                                  See id.
   § 1129(a)(7)(A)(ii) (emphasis added).
           So, even if “the legal rate” is the Federal Judgment Rate, the Code
   does not preclude unimpaired creditors from receiving default-rate post-
   petition interest in excess of the Federal Judgment Rate in solvent-debtor
   Chapter 11 cases. See Shelley & Noh, supra note 16, at 368–69 (arguing that
   “§ 1129(a)(7) should not be interpreted to require the application of the
   federal judgment rate” and that “the fair and equitable test [of § 1129(b)]
   will, in many instances, permit the payment of interest at a higher rate,
   particularly when the higher rate is set forth in a contract”). Recall that
   under § 1124(1), unimpaired creditors’ “legal, equitable, and contractual
   rights” must remain “unaltered.” And as a matter of equity, creditors are
   entitled to contractually specified rates of interest “on” their claims when a
   solvent debtor is fully capable of paying up. 27 As the bankruptcy court rightly

   (“[I]nterest shall be computed at the rate determined under section 1961(a) of this title
   . . . .”); 15 U.S.C. § 4303(a)–(c) (similar).
           27
              This is consistent with our prior holding that the Code’s disallowance provisions
   do not operate to “impair” creditors. Ultra, 943 F.3d at 765. Section 502(b)(2) operates
   to disallow “unmatured interest” that is part of a claim—not interest on a claim, which is
   what the contractual default rates here specify. A broader reading of § 502(b)(2) to
   disallow all post-petition interest, whether as part of a claim or on a claim, would plainly

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   noted below, “[t]his equitable right is the root of the solvent-debtor
   exception.” Ultra, 624 B.R. at 203. 28 And as we have explained, the solvent-
   debtor exception survived the Bankruptcy Code’s enactment. See supra
   Section II.B.
           The requirements of § 1129(b) for plan confirmation buttress our
   conclusion. That section states that the bankruptcy court shall only confirm
   a plan if it is “fair and equitable”—a test long understood to mean the
   “absolute priority rule.” See 11 U.S.C. § 1129(b)(2)(B)(ii); In re Linn Energy,
   L.L.C., 936 F.3d 334, 341 n.1 (5th Cir. 2019) (“The absolute priority rule
   requires that certain classes of claimants be paid in full before any member of
   a subordinate class is paid.” (quoting In re Seaquest Diving, LP, 579 F.3d 411,
   420 n.5 (5th Cir. 2009))). As the bankruptcy court explained well, unsecured
   creditors vying against each other for shares of a “limited pot of assets” have
   no equitable rights vis-à-vis each other to contractual rates of interest on their
   claims: they must be treated equally; but “[w]hen the struggle is between
   creditors and equity holders, as opposed to creditors and creditors, [creditors’]
   equitable right [to contractual post-petition interest rates] is critical.” Ultra,
   624 B.R. at 203 (emphasis added). And per the absolute priority rule,
   creditors’ rights prevail.
                                             III.
           To sum up, Ultra is right about one thing: Creditors’ Make-Whole
   Amount is disallowed “unmatured interest” under the Bankruptcy Code.
   But the traditional solvent-debtor exception compels payment of the Make-

   conflict with § 1129(a)(7)(A)(ii) and § 726(a)(5), which expressly operate to allow post-
   petition interest on claims.
           28
             See also Ultra, 624 B.R. at 203 (“The solvent-debtor exception has existed
   throughout the history of bankruptcy law and § 1124 provides a means to implement the
   exception within the plan confirmation framework of the Bankruptcy Code.”).

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   Whole Amount because it is a valid contractual debt under applicable state
   law. For similar reasons, Ultra cannot avoid payment of contractual default-
   rate interest in favor of the much-lower Federal Judgment Rate: Creditors are
   entitled to what they bargained for with this solvent debtor, and the Code
   does not preclude the contractual interest rate. The judgment of the
   bankruptcy court is AFFIRMED.

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                                         No. 21-20008

   Andrew S. Oldham, Circuit Judge, dissenting:
           The majority correctly concludes that the Make-Whole Amount is
   unmatured interest in disguise. And it acknowledges that the Bankruptcy
   Code bars all unmatured interest. See 11 U.S.C. § 502(b)(2). In my view, it
   necessarily follows that the Code bars the Make-Whole Amount.
           The majority nevertheless holds that an unwritten solvent-debtor
   exception “operates in this case to suspend § 502(b)(2)’s disallowance of
   [the] Make-Whole Amount.” Ante, at 17. I recognize that the majority is
   attempting to faithfully apply confusing Supreme Court precedent in a
   difficult case. But the clear statutory text governing this issue compels me to
   respectfully dissent.
                                               I.
           In my view, the solvent-debtor exception didn’t survive the adoption
   of the Bankruptcy Code. Premise one: If it’s “unmistakably clear” that a
   Code provision is incompatible with a prior bankruptcy practice, then the
   Code overrides that prior practice. 1 Cohen v. de la Cruz, 523 U.S. 213, 221–22
   (1998); see also ante, at 23 (collecting cases). Premise two: It’s unmistakably
   clear that 11 U.S.C. § 502(b)(2), which allows a given claim “except to the
   extent that . . . (2) such claim is for unmatured interest,” is incompatible with
   the preexisting solvent-debtor exception. Conclusion: The Code overrides
   the solvent-debtor exception.
           I take the first premise to be uncontroversial, see ante, at 23, but I
   should elaborate on the second. The Code provides that all claims for
   unmatured interest are disallowed. The solvent-debtor exception provides

           1
             The other side of the coin: If the Code is not unmistakably clear, then the prior
   practice survives. See ante, at 23 (discussing and collecting cases). That proposition is
   orthogonal to my argument because, of course, I think the Code is unmistakably clear.

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   that not all claims for unmatured interest are disallowed. That’s a stark
   contradiction. And the statutory text offers no alternative interpretation to
   avoid it, as the majority appears to recognize. See ante, at 17 (“[W]e conclude
   that the pre-Code doctrine concerning solvent debtors’ obligations remains
   good law, and the exception operates in this case to suspend § 502(b)(2)’s
   disallowance of Creditors’ Make-Whole Amount.” (emphasis added)); see
   generally id. at 16–27 (majority’s analysis, contending the statutory text isn’t
   clear enough but not explaining what else the text could mean).
                                          II.
          The majority nonetheless disputes the second premise, maintaining
   it’s not unmistakably clear that 11 U.S.C. § 502(b)(2) is incompatible with the
   solvent-debtor exception. Its analysis begins with the Bankruptcy Acts of
   1898 and 1938. See ante, at 21 (citing Bankruptcy Act of 1898, 30 Stat. 544;
   Bankruptcy Act of 1938, 52 Stat. 840). For reference, here’s the relevant text:
          Debts of the bankrupt may be proved and allowed against his
          estate which are (1) a fixed liability, as evidenced by a judgment
          or an instrument in writing, absolutely owing at the time of the
          filing of the petition against him, whether then payable or not,
          with any interest thereon which would have been recoverable at that
          date or with a rebate of interest upon such as were not then
          payable and did not bear interest; (2) due as costs taxable
          against an involuntary bankrupt who was at the time of the
          filing of the petition against him plaintiff in a cause of action
          which would pass to the trustee and which the trustee declines
          to prosecute after notice; (3) founded upon a claim for taxable
          costs incurred in good faith by a creditor before the filing of the
          petition in an action to recover a provable debt; (4) founded
          upon an open account, or upon a contract express or implied;

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          and (5) founded upon provable debts reduced to judgments
          after the filing of the petition and before the consideration of
          the bankrupt’s application for a discharge, less costs incurred
          and interests accrued after the filing of the petition and up to
          the time of the entry of such judgments.

          ...

          A claimant shall not be entitled to collect from a bankrupt
          estate any greater amount than shall accrue pursuant to the
          provisions of this Act.

   Act of 1898, §§ 63(a), 65(e), 30 Stat. at 562–63, 564 (emphasis added). The
   1938 Act has almost identical wording—none of the slight differences are
   relevant here. See Act of 1938, § 63(a), 65(e), 52 Stat. at 873, 875.
          The majority points to the italicized text, contending it amounts to a
   rather obvious bar on unmatured interest. See ante, at 24. At the least, the
   majority says, this antique unmatured-interest bar is just as clear as 11 U.S.C.
   § 502(b)(2)’s current bar. See ibid. (quoting the latter provision and saying,
   “this affords no greater clarity than the 1898 and 1938 Acts, which similarly
   limited claims for interest to what ‘would have been recoverable at’ the date
   the bankruptcy petition was filed—i.e., matured interest” (citation
   omitted)).
          The majority then cites a handful of old cases that read the 1898 and
   1938 Acts not to foreclose the solvent-debtor exception. Ante, at 21
   (collecting cases). One of the cases cited is even binding precedent in this
   circuit. See Johnson v. Norris, 190 F. 459 (5th Cir. 1911). If the old statutory
   bar on unmatured interest was just as clear as the Code’s current bar, aren’t
   we obligated to follow these precedents? Put differently, 11 U.S.C.
   § 502(b)(2) can’t possibly be an “unmistakably clear” indication that

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   Congress wanted to deviate from courts’ longstanding interpretation of the
   1898 and 1938 Acts. See Cohen, 523 U.S. at 221–22. So goes the argument.
          The problem, in my view, is that the old statutes weren’t just as clear
   as 11 U.S.C. § 502(b)(2) is. It’s simply not true that the 1898 and 1938 Acts
   precluded unmatured interest, full stop. Rather, the language quoted by the
   majority—“with any interest thereon which would have been recoverable at
   that date”—comes from a clause (which is offset by a comma) in one item in
   a five-item list (whose entries are separated by semicolons). See Ante, at 24
   (quoting Act of 1898 § 63(a)(1), 30 Stat. at 562–63; Act of 1938, § 63(a)(1),
   52 Stat. at 873). The quoted text therefore modifies only that first item, as the
   block quote above makes clear. That first item, in turn, concerns a specific
   subset of claims: “a fixed liability, as evidenced by a judgment or an
   instrument in writing, absolutely owing at the time of the filing of the petition.”
   Act of 1898, § 63(a)(1), 30 Stat. at 562–63 (emphasis added); Act of 1938,
   § 63(a)(1), 52 Stat. at 873 (emphasis added). Contrast that with the category
   of claims discussed in the last listed item: “provable debts reduced to
   judgments after the filing of the petition and before the consideration of the
   bankrupt’s application for a discharge.” Act of 1898, § 63(a)(5), 30 Stat. at
   563 (emphasis added); Act of 1938, § 63(a)(5), 52 Stat. at 873 (emphasis
   added). (The Make-Whole Amount at issue in this case, which seems never
   to have been reduced to judgment, is itself a good example of a debt that
   doesn’t fit into the latter category but does fit into the former.) The upshot:
   Though § 63(a)(1) of the Acts expressly prohibits some unmatured interest,
   it does not contain a blanket bar on all unmatured interest—unlike 11 U.S.C.
   § 502(b)(2).
          It also bears emphasis that the old § 63(a)(1) operates differently and
   less directly to bar unmatured interest than does § 502(b)(2). To see the old
   bar, we need to read § 63(a) together with § 65(e). The former gives a five-
   item list of allowed claims—claims upon which a creditor could recover in

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   bankruptcy. Act of 1898, § 63(a), 30 Stat. at 562–63 (beginning with, “[d]ebts
   of the bankrupt may be proved and allowed against his estate which are . . .”
   and going on to provide five categories of recoverable debts); Act of 1938,
   § 63(a), 52 Stat. at 873 (nearly identical). As we’ve seen, that list contains
   some qualifications, but it mainly serves the positive function of listing what is
   permissible. And the first permissible claims is “a fixed liability, as evidenced
   by a judgment or an instrument in writing, absolutely owing at the time of the
   filing of the petition against him, whether then payable or not, with any
   interest thereon which would have been recoverable at that date or with a rebate of
   interest upon such as were not then payable and did not bear interest.” Act
   of 1898, § 63(a)(1), 30 Stat. at 562–63 (emphasis added); Act of 1938, § 63(a),
   52 Stat. at 873 (emphasis added). Thus, claims for matured interest are
   allowed. 2
           Section 65(e) is a sort of zipper clause. It provides that “[a] claimant
   shall not be entitled to collect from a bankrupt estate any greater amount than
   shall accrue pursuant to the provisions of this Act.” Act of 1898, § 65(e), 30
   Stat. at 564; Act of 1938, § 65(e), 52 Stat. at 875. That provision serves the
   negative function of stipulating that every claim not listed as permissible is not
   permissible. But because § 63(a)(1) allows matured interest without allowing
   unmatured interest, and because no other provision allows unmatured
   interest, it follows that unmatured interest is barred by the combination and
   implication of §§ 63(a)(1) and 65(e).

           2
              The clause “or with a rebate of interest upon such as were not then payable and
   did not bear interest” is not a standalone bar on unmatured interest. That’s because its
   “rebate” applies only to “interest upon such [claims] as were not then payable and did not
   bear interest.” (Emphasis added.) That means the rebate doesn’t apply to unmatured
   interest on claims that were payable at the time of filing. That is, it could be that the claim
   itself was payable at the time of filing and yet the interest didn’t mature until after filing.
   The rebate clause doesn’t say anything about that kind of unmatured interest.

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            The very first of the majority’s old cases, Johnson v. Norris,
   interpreted the Act of 1898 in just this way. First, our court noted that
   § 63(a)(1) allows claims for matured interest. Johnson, 190 F. at 561. Second,
   we pointed out that § 65(e) disallows any claims not allowed. Ibid. Third, we
   inferred that “[o]rdinarily, no question as to subsequently accruing interest
   can arise,” i.e., that unmatured interest is generally barred. Ibid. We then
   went on to hold that this bar didn’t apply in solvent-debtor cases. Id. at 561–
   65. The important point for present purposes, however, is that the Johnson
   court did not (a) hold that the Acts expressly barred the unmatured interest
   and (b) then hold the express bar inapplicable in solvent-debtor cases. Rather,
   the court (a) held (correctly) that the Acts implicitly barred unmatured
   interest and (b) then held the implicit bar inapplicable in solvent-debtor
   cases.
            So the Johnson court saw more ambiguity in the Acts than today’s
   majority does. And that’s doubly important because Johnson proved to be the
   seminal case on the topic. Three years after the decision, the Supreme Court
   reached the same conclusion, citing only two sources in support: Blackstone
   and Johnson. See Am. Iron & Steel Mfg. Co. v. Seaboard Air Line Ry., 233 U.S.
   261, 266 (1914) (explaining that the general rule against unmatured interest
   “did not prevent the running of interest during the Receivership; and if as a
   result of good fortune or good management, the estate proved sufficient to
   discharge the claims in full, interest as well as principal should be paid”).
   Three of the majority’s cited cases relied on Johnson in similar fashion. See
   Brown v. Leo, 34 F.2d 127, 128 (2d Cir. 1929); Littleton v. Kincaid, 179 F.2d
   848, 852 (4th Cir. 1950); In re Magnus Harmonica Corp., 159 F. Supp. 778,
   780 (D.N.J. 1958). This widespread reliance suggests that courts allowed the
   solvent-debtor exception to persist, not because they thought the exception
   could override an explicit congressional prohibition on unmatured interest,
   but because they thought any such prohibition was implicit at best under the

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   old Code. As the Supreme Court put it in 1949, “[t]he long-standing rule
   against post-bankruptcy interest thus appears implicit in our current
   Bankruptcy Act.” City of New York v. Saper, 336 U.S. 328, 332.
          If all of that sounds convoluted, that’s precisely the point. The
   majority’s argument rests on the premise that the 1898 and 1938 Acts barred
   unmatured interest just as clearly as does 11 U.S.C. § 502(b)(2). See ante, at
   24. But that premise is, with deepest respect, false. The old statutes did bar
   unmatured interest—but the reader has to stitch together two separate
   provisions and make an inference from them to see it. The current Code, in
   sharp contrast, goes for the jugular by flatly disallowing “claim[s] for
   unmatured interest.” 11 U.S.C. § 502(b)(2). The majority protests that
   “Congress has not explicitly addressed claims for unmatured interest owed
   by solvent debtors,” ante, at 26, but I am not sure what Congress should have
   done to make the point more lucid short of saying, “and the solvent-debtor
   exception doesn’t apply.” Congress need not speak superfluously to speak
   “unmistakably.” See Cohen, 523 U.S. at 221–22; BFP v. Resol. Tr. Corp., 511
   U.S. 531, 546 (1994) (“The Bankruptcy Code can of course override by
   implication when the implication is unambiguous.”).
                                    *        *         *
          We all agree that the Make-Whole Amount is unmatured interest.
   And we all agree that 11 U.S.C. § 502(b)(2) bars unmatured interest. I would
   leave it at that. The Make-Whole Amount should be barred, and the creditors
   should recover post-petition interest only at the federal judgment rate.
   Neither the solvent-debtor exception’s historical pedigree nor its policy
   underpinnings—no matter how compelling—can overcome Congress’s
   clear, and clearer-than-ever, command on this point.
          I respectfully dissent.

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