Make Whole Provisions Triggered Upon Acceleration of Debt In Bankruptcy Are Enforceable Absent Clear Contractual Language to the Contrary.

In Delaware Trust Co. v. Energy Future Intermediate Holding Co., 842 F.3d 247 (3d Cir. 2016),the Third Circuit stated that (i) New York and federal courts deem the term “redemption” to include both pre- and post-maturity repayments of debt, (ii) refinancings of debt by Energy Futures Intermediate Holding Co. (“EFIH”) with debtor-in-possession financing were optional redemptions, and (iii) although bankruptcy accelerated the maturity date of the debt,contract terms applicable before the acceleration remain applicable afterward, and held that the make-whole provisions were enforceable by EFIH noteholders after the filing of a bankruptcy petition by EFIH absent clear contractual language to the contrary….

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