In re MPM Silicones, LLC

Three groups of creditors appealed MPM's substantially consummated plan of reorganization under Chapter 11 of the Bankruptcy Code. The Subordinated Notes holders challenged the lower courts' conclusions that their claims were subordinate to the Second-Lien Notes holders' claims; the Senior-Lien Notes holders contended that the lower courts erroneously applied a below-market interest rate to their replacement notes; the Senior-Lien Notes holders challenge the lower courts' rulings that they were not entitled to a make-whole premium; and debtors argued that the court should dismiss these appeals as equitably moot. The Second Circuit found merit only in the Senior-Lien Notes holders' contention with respect to the method of calculating the appropriate interest rate for the replacement notes. The court held that the Second-Lien Notes stand in priority to the Subordinated Notes; held that the Senior-Lien Notes holders were not entitled to the make-whole premium; declined to dismiss any of the appeals as equitably moot; and remanded to the bankruptcy court to assess whether an efficient market rate could be ascertained, and if so, applied to the replacement notes. View "In re MPM Silicones, LLC" on Justia Law