PG&E Corporation

Opinion

1 2 3 4 5 6 7 UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA 8 In re: ) Bankruptcy Case 9 ) No. 19-30088-DM PG&E CORPORATION, ) 10 ) Chapter 11 - and - ) 11 ) Jointly Administered 12 PACIFIC GAS AND ELECTRIC COMPANY, ) ) 13 Debtors. ) Date: December 11, 2019 ) Time: 10:00 AM 14 ☐ Affects PG&E Corporation ) ) Place: Courtroom 17 15 ☐ Affects Pacific Gas and ) 450 Golden Gate Ave. Electric Company ) 16th Floor 16 ☒ Affects both Debtors ) ) San Francisco, CA 17 ) * All papers shall be filed in ) 18 the Lead Case, No. 19-30088 (DM). ) ) 19 MEMORANDUM DECISION REGARDING POSTPETITION INTEREST 20 I. INTRODUCTION 21 On December 11, 2019, the court heard oral argument on the 22 discrete legal issue of the applicable postpetition interest to 23 be paid to four classes of allowed unsecured and unimpaired 24 claims, under any chapter 11 reorganization plan for solvent 25 debtors PG&E Corporation and Pacific Gas and Electric Company 26 (“Debtors”). The Debtors, joined by certain Shareholders, argue 27 that creditors in all four classes should receive interest 28 1 calculated pursuant to 28 U.S.C. § 1961(a) (the “Federal 2 Interest Rate”) in effect as of the petition date (January 29, 3 2019) these chapter 11 cases. That rate for these jointly 4 administered cases is 2.59 percent. Debtors contend that use of 5 the Federal Interest Rate is consistent with In re Cardelucci, 6 285 F.3d 1231 (9th Cir. 2002) (“Cardelucci”), which holds that 7 unsecured creditors in a solvent case should receive 8 postpetition interest calculated at the Federal Interest Rate. 9 Several parties, including the Official Committee of 10 Unsecured Creditors, the Ad Hoc Committee of Senior Unsecured 11 Noteholders, the Ad Hoc Committee of Holders of Trade Claims and 12 others (collectively “Unsecured Creditors”) oppose the motion. 13 They urge application of various rates, generally determined by 14 applicable contracts between the Debtors and the respective 15 claimants, judgment rates or some other rate. 16 For the following reasons, the court concludes that the 17 Debtors are correct, that Cardelucci controls and that the 18 Federal Interest Rate applies to any Plan. 19 II. APPLICABLE LAW 20 Statutory construction of the Bankruptcy Code1 is “a 21 holistic endeavor” requiring consideration of the entire 22 statutory scheme. United Sav. Ass'n of Texas v. Timbers of 23 Inwood Forest Assocs., Ltd., 484 U.S. 365, 371, 108 S.Ct. 626, 24 98 L.Ed.2d 740 (1988), cited by In re BCE West, L.P., 319 F.3d 25 1166, 1171 (9th Cir. 2003). 26 27 1 Unless otherwise indicated, all chapter and section 28 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532. 1 In Timbers, the Supreme Court utilized this holistic 2 approach to analyze five seemingly unconnected provisions of 3 Title 11 in determining that oversecured creditors are entitled 4 to receive postpetition interest. Applying a similar holistic 5 approach, this court has looked to the structure of the 6 Bankruptcy Code and the purposes behind its many parts to 7 conclude while unsecured creditors are entitled to postpetition 8 interest in a solvent estate, the Bankruptcy Code requires 9 application of the Federal Interest Rate to those claims and 10 that such an application does not impair these claims. Even if 11 Cardelucci were not binding, the court would reach the same 12 conclusion. 13 Chapter 5, subchapter I (“Creditors and Claims”) of the 14 Bankruptcy Code sets forth the guiding principles for filing and 15 allowance of claims or interests, administrative expenses, 16 determination of secured status and other provisions not 17 important to the current analysis. In contrast, the court must 18 apply the critical provisions of chapter 11, subchapter II (“The 19 Plan”). Section 1123(a) states what a plan “shall” do or 20 include. Section 1123(b) states what a plan “may” do or 21 include. As a definitional matter, section 1124 explains that a 22 class of claims or interest is impaired unless the plan leaves 23 certain legal, equitable and contractual rights unaltered (§ 24 1124(1)), or cures, restates, or compensates the rights of class 25 or interest members (§ 1124(2)(A)-(E)). 26 The structure of the Bankruptcy Code and the applicability 27 of these definitional and empowering sections, therefore, 28 dictate rights that are fixed as of the petition date and what 1 rules apply after that. Nothing suggests that, absent specific 2 rules, provisions dealing with prepetition entitlements carry 3 over postpetition. For example, section 502(b)(2) clearly 4 provides that a claim for “unmatured interest”2 may not be 5 allowed. An exception to the rule is found in section 506(b) 6 that permits accrued interest to be allowed as long as the 7 security is “greater than the amount of such claim.” 8 The Unsecured Creditors’ argument that somehow the 9 definitions and remedies found in section 1124 override the 10 plain impact of section 502(b)(2) is simply not persuasive and 11 would require the court to ignore not only the plain words of 12 the statute but also the holistic notion of treating them as 13 part of a combined comprehensive instrument of definitions, 14 applicability and implementation. Section 1124(1) describes 15 what claims are unimpaired and section 1124(2) describes what is 16 necessary for a plan to “unimpair” impaired claims. In 17 contrast, chapter 5 (“Creditors and Claims”) dictates how claims 18 and interests are dealt with in the substantive chapters: 7, 11, 19 12 and 13. The subparts of section 502(b) list nine specific 20 rules for affecting allowed claims. 21 An example not directly related to this case proves the 22 point. Section 502(b)(4) disallows the claim of an insider or 23 an attorney to the extent it exceeds the reasonable value of the 24 services. Unsecured Creditors could not persuade the court or 25 even make a convincing argument that somehow an insider or an 26 attorney whose asserted claim exceeds a reasonable value could 27 2 No one has suggested that “unmatured interest” means 28 anything other than “postpetition interest.” 1 take refuge in section 1124((1)’s definitional provision and 2 escape the clear intention of Congress to limit unreasonable 3 claims for services in the same manner it has limited 4 postpetition unsecured claims for unmatured interest. For the 5 same reason, underlying non-bankruptcy law must give way to 6 contrary provisions of the Bankruptcy Code. Travelers Cas. & 7 Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 444 8 (2007) (quoting Raleigh v. Illinois Dept. of Revenue, 530 U.S. 9 15, 20 (2000). 10 With that background, the court turns to the applicability 11 of Cardelucci and its clear message. 12 III. THIS COURT’S RESPONSIBILITY UNDER STARE DECISIS 13 This court is bound by the Ninth Circuit’s Cardelucci

14 decision unless it can be distinguished or overruled: 15 Courts are bound by the decisions of higher courts 16 under the principle of stare decisis. The doctrine derives from the maxim of the common law, “Stare 17 decisis et non quieta movere,” which literally means, “Let stand what is decided, and do not disturb what is 18 settled.” See 1B Jeremy C. Moore et al., Moore's 19 Federal Practice ¶ 0.402[1] (2d ed. 1992). Moore's treatise describes the rule as follows: 20 The rule, as developed in the English law, 21 is that a decision on an issue of law 22 embodied in a final judgment is binding on the court that decided it and such other 23 courts as owe obedience to its decisions, in all future cases. Id. 24 Under this principle a decision of a circuit court of 25 appeal is binding on all lower courts in the circuit, 26 including district courts and bankruptcy courts (absent a contrary United States Supreme Court 27 decision). Zuniga v. United Can Co., 812 F.2d 443, 450 (9th Cir. 1987). 28 1 This i s true even if there is a split of opinion between the controlling circuit and another circuit 2 court of appeals, and the lower court believes that 3 the controlling circuit court is in error. Zuniga, 812 F.2d at 450; Hasbrouck v. Texaco, Inc., 663 F.2d 4 930, 933 (9th Cir. 1981)[.]

5 In re Globe Illumination Co., 149 B.R. 614, 617 (Bankr. C.D. 6 Cal. 1993) (multiple internal citations omitted). 7 Cardelucci is a published panel opinion by the Court of 8 9 Appeals for the Ninth Circuit. It is binding on this court. 10 State Farm Fire & Cas. Ins. Co. v. GP West, Inc., 2016 WL 11 3189187, 90 F. Supp.3d 1003, 1018 (D. Haw. 2016) (citation and 12 internal quotation marks omitted). See Lair v. Bullock, 798 F.3d 13 736, 747 (9th Cir. 2015) (“[W]e are bound by a prior three-judge 14 panel's published opinions, ....”) (citing Miller v. Gammie, 335 15 16 F.3d 889, 892–93 (9th Cir. 2003) (en banc)). 17 IV. THE HOLDING OF CARDELUCCI 18 In Cardelucci, the Ninth Circuit framed the issue before it 19 as follows: 20 This appeal presents the narrow but important issue of whether such post-petition interest is 21 to be calculated using the (federal judgment 22 rate) or is determined by the parties’ contract or state law. 23 Cardelucci, 285 F.3d at 1231. 24 The Ninth Circuit held that in chapter 11 cases involving 25 26 solvent debtors, unsecured creditors are entitled to 27 postpetition interest at the federal judgment rate, not at not 28 1 at contractual or state statutory rates. Id. at 1234. In so holding, the Ninth Circuit observed that application of the 2 3 lower federal judgment rate did not violate an unsecured 4 creditor’s substantive due process rights (id. at 1236) and that 5 utilization of federal judgment rate for all claims was 6 rationally related to legitimate interests in efficiency, 7 fairness, predictability, and uniformity within bankruptcy 8 9 system. Id. 10 While the court pinpointed a “narrow but important 11 issue,” it did not narrow the application of its holding, 12 which must be applied broadly given the structure of the 13 Bankruptcy Code and the clear and plain meaning of its 14 applicable provisions, as noted above. 15 16 In Cardelucci, the debtor and his opponents, holders of a 17 state court judgment, set aside various differences and thereby 18 permitted confirmation to proceed subject to a reservation of 19 rights concerning the applicable postpetition interest rate.3 20 The Ninth Circuit concluded that the reference by Congress to 21 22 “the legal rate” in section 726(a)(5) was intentional, in that 23

24 3 While the opinion is silent on the specifics of that debtor’s plan, the opponents’ claim was impaired for reasons not 25 relevant to this analysis. In the present case the Unsecured 26 Creditors’ claims are unimpaired. The Unsecured Creditors put the cart before the horse when they contend that the application 27 of the “fair and equitable” test of section 1129(b) determines that their claims are impaired under section 1124. 28 1 Congress had rejected proposed language of “interest on claims allowed.” Cardelucci, 285 F.3d at 1234. The court also 2 3 emphasized that a single, easily determined rate for all 4 postpetition interest ensures equitable treatment of creditors.4 5 Although Cardelucci was a chapter 11 case, the reference to 6 section 726(a)(5) was critical. Without that reference, the 7 court would be compelled by section 502(b)(2) to allow claims 8 9 “except to the extent that . . . (2) such claim is for unmatured 10 interest.”5 There is no specific provision in chapter 11 that 11 allows any interest on unsecured claims.6 Without that 12 reference, Unsecured Creditors would be left with no allowed 13 postpetition interest. 14 The rule in the seventeen years since Cardelucci is clear: 15 16 unsecured creditors of a solvent debtor will be paid the Federal 17 Interest Rate whether their prepetition contracts call for 18 higher or lower rates, or applicable state law judgment rates 19 20

21 4 In this case, given the vast array of creditors’ claims, the equal application of such uniform policy is all the more 22 compelling. 23 5 The exception found in section 506(b) for secured claims has 24 no bearing here.

25 6 The court rejects the argument by the Ad Hoc Committee of 26 Holders of Trade Claims that section 103(b) precludes consideration of section 726(a)(5). Cardelucci merely compared 27 the chapter 7 outcome (apply the Federal Interest Rate) as part of the “best interest” test of Section 1129(a)(9) to compare 28 whether creditors do better in chapter 7 or chapter 11. 1 are higher, or there are no other applicable rates to consider. Nor is that rule limited to impaired claims. Cardelucci is 2 3 unequivocal and articulates several reasons for broad 4 application of its holding despite the recognition of the narrow 5 issue presented: 6 1. The use of the term “legal rate” indicates the Congress 7 intended the single source to be statutory because of the common use of the term when the Bankruptcy Code was 8 enacted. 9 2. Using the federal rate promotes uniformity within federal 10 law.

11 3. The analogous post-judgment interest entitlement 12 compensates for being deprived of compensation for the loss of time between ascertainment of damages and 13 payment.

14 4. Application of a single, easily determined rate ensures equitable treatment of creditors. 15

16 5. With a uniform rate, no single creditor will be eligible for a disproportionate share of the remaining assets. 17 Cardelucci, 285 F.3d at 1235-1236. 18 The Unsecured Creditors refer to the opinion’s “parting 19 note” to support their cause. The actual conclusion rejects a 20 substantive due process argument that has not been developed 21 here for good reasons. To this court, the “parting note” that 22 dooms their cause is in the penultimate paragraph, and bears 23 repeating: 24 The Court recognizes that these two interests, 25 fairness among creditors and administrative 26 efficiency, may be of limited relevance in certain bankruptcy proceedings. Where there are only a few 27 unsecured creditors seeking post-petition interest and there are sufficient assets to pay all claims for all 28 1 i en qt ue ir te ys t a m( os ni gc ) c, r et dh ie tr oe r sw i ol rl pb re a cn to i cc ao ln ic te yr .n s I nr e tg ha or sd ei ng 2 instances, a debtor may receive a windfall from the application of a lower federal interest rate to an 3 award of post-petition interest. Nonetheless ‘interest at the legal rate’ is a statutory term with a 4 definitive meaning that cannot shift depending on the 5 interests invoked by the specific factual circumstances before the court. See In re Thompson, 16 6 F.3d 576, 581 (4th Cir. 1994). 7 Cardelucci, 285 F.3d at 1236. 8 9 Unsecured Creditors’ reliance on older cases invoking the 10 “absolute priority” rule in defense of postpetition interest at 11 the contract rate are unavailing. Consolidated Rock Products 12 Co. v. Du Bois, 312 U.S. 510 (1941), was decided under the 13 former Bankruptcy Act and is of questionable viability now that 14 the Bankruptcy Code includes sections 726(a)(5) and 502(b)(2). 15 Similarly, Debentureholders Protective Committee of Continential 16 Inv. Corp. v. Continental Inv. Corp., 679 F.2d 264 (1st Cir. 17 1982), was decided under Chapter X of the former Bankruptcy Act 18 and thus offers no guidance here. 19 The Ninth Circuit’s decision in L&J Anaheim Associates v. 20 Kawasaki Leasing International, Inc. (In re L&J Anaheim 21 Associates), 995 F.2d 940 (9th Cir. 1993) does not change the 22 outcome. L&J Anaheim was decided only a few months after 23 Cardelucci and did not cite it, as it addressed an altogether 24 different issue. 25 In L&J Anaheim, a secured creditor filed a chapter 11 plan 26 that was opposed by the debtor. In order to achieve the 27 statutory requirement for at least one impaired class, the 28 creditor, Kawasaki, proposed changing its own state law remedies 1 following debtor’s breach. It eliminated its right to exercise 2 various remedies under the California Uniform Commercial Code, 3 replacing those entitlements under its proposed plan with a 4 requirement that its collateral and a related lawsuit be sold at 5 public auction under procedures mandated by the Bankruptcy Code. 6 In determining that Kawasaki’s rights were altered, and 7 thus its claim was impaired, the court stated: 8 At first blush the idea that an improvement in ones’ position as a creditor might constitute ‘impairment’ 9 seems nonsensical.” 10 L & J Anaheim, 995 F.2d at 942. 11 The court examined the term of art adopted by Congress to 12 replace language in the prior Bankruptcy Act and concluded that 13 section 1124 created certainty in determining whether or not a 14 creditor was impaired. Once again, section 1124 is 15 definitional, describing improvement in the context of the plan 16 presented as impairment. The court had no occasion to address 17 whether, for an impaired class, postpetition interest was even 18 relevant. 19 Of importance here is that the plan’s own language altered 20 Kawasaki’s rights; in the present case, the Bankruptcy Code, and 21 not the Plan, is what causes Unsecured Creditors to have their 22 postpetition interest limited to the Federal Judgment Rate. The 23 Plan is not the culprit. 24 A few months after Cardelucci, the Ninth Circuit decided 25 Platinum Capital, Inc. v. Sylmar Plaza, L.P. (In re Sylmar 26 Plaza, L.P., 314 F.3d 1070 (9th Cir. 2002). There, the court 27 addressed whether or not a plan proponent had proposed the plan 28 1 in good faith under section 1129(a)(3) when its sole purpose was 2 to enable the debtors to cure and reinstate an obligation. At 3 that time, Great W. Bank & Trust v. Entz-White Lumber and 4 Supply, Inc. (In re Entz-White Lumber and Supply, Inc.), 850 5 F.2d 1338 (9th Cir. 1988), was good law. Under Entz-White, plan 6 proponents were permitted to cure defaults under former section 7 1124(3), leaving the objecting creditor not impaired under 8 section 1124. Perhaps predicting the crucial distinction 9 between what a plan does and what the Bankruptcy Code does, the 10 Sylmar Plaza court rejected the argument that a plan lacks good 11 faith when it permits owners of a solvent debtor to avoid paying 12 postpetition interest at the default interest rate. The fact 13 that a creditor’s contractual rights are adversely affected does 14 not by itself warrant a bad faith finding. Quoting the 15 bankruptcy court in In re PPI Enters. (US), Inc., 228 B.R. 339 16 (Bankr. D. Del. 1998), the court stated: 17 In enacting the Bankruptcy Code, Congress made a determination that an eligible debtor should have the 18 opportunity to avail itself of a number of Code 19 provisions which adversely altered creditors’ contractual and non bankruptcy rights . . . . 20 The fact that a debtor proposes a plan which it avails 21 itself of an applicable Code provision does not constitute evidence of bad faith. 22 Sylmar Plaza, 314 F.3d at 1075 (citations omitted). 23 Cases cited by the Sylmar Plaza creditor to support a per 24 se rule were distinguishable in that neither adopted or approved 25 such a rule and, moreover, “. . . because none involved an 26 objection to a plan by an unimpaired creditor.” Id. 27 28 1 At oral argument counsel for one of the Unsecured Creditors 2 argued that Cardelucci has been superseded by In re New 3 Investments, Inc., 840 F.3d 1137 (9th Cir. 2016). That argument 4 is unavailing. The New Investments decision concludes that the 5 1994 amendments to section 1124 abrogated the holding of Entz- 6 White that default interest rates could be eliminated by curing 7 defaults under a plan. The decision does not even mention 8 postpetition interest or Cardelucci and does not deal with 9 unimpaired claims under section 1124(1) and thus is of no 10 bearing on the issue presented or the outcome here. 11 V. IMPAIRED OR UNIMPAIRED CLAIMS ARE TREATED ALIKE 12 Unsecured Creditors attempt in vain to escape Cardelucci’s 13 impact by arguing that, unlike the impaired claim there, their 14 claims will be unimpaired under a plan. The court rejects 15 Unsecured Creditors’ argument. 16 First, Cardelucci, in answering the narrow question, drew 17 no distinction as to whether the rule it announced was confined 18 only to impaired claims. The clear and unequivocal analysis 19 based on section 726(b)(5) is obvious: it applies to all 20 unsecured and undersecured claims in a surplus estate. 21 Second, no plan compels the payment of the Federal Interest 22 Rate. Rather, the Bankruptcy Code does. A similar analysis was 23 applied very recently by the Fifth Circuit in In re Ultra 24 Petroleum Corporation, ___ F.3d ___, 2019 WL 6318074 (November 25 26, 2019). There, the court contrasted the treatment of 26 creditors’ claims outside of bankruptcy and whether the plan 27 itself was a source of limitation on their legal, equitable and 28 contractual rights, or rather the Bankruptcy Code. The court 1 looked to the language of section 1124(1), defining not impaired 2 when the plan “. . . leaves unaltered [the claimant’s] legal, 3 equitable and contractual rights.” The court ruled that a claim 4 is impaired only if the plan itself does the altering, not what 5 the Bankruptcy Code does. 6 Ultra Petroleum agreed with the only other court of appeals 7 decision to draw the distinction between what a plan might do 8 and what the Bankruptcy Code does do. In Solow v. PPI 9 Enterprises (U.S.) Inc. (In re PPI Enterprises (U.S.) Inc.), 324 10 F.3d.197 (3d Cir. 2003) the court upheld confirmation of a plan 11 notwithstanding a limitation on an objecting landlord’s 12 statutorily capped damages under section 502(b)(6). It held that 13 where section 502(b)(6) alters a creditor’s non-bankruptcy 14 claim, there is no alteration of the claimant’s “legal, 15 equitable and contractual rights” for purposes of impairment 16 under section 1124(1). Id. at 203. 17 The PPI Enterprises court agreed with the bankruptcy 18 court’s analysis in In re American Solar King Corp., 90 B.R. 808 19 (Bankr. W.D. Tex. 1988) where the bankruptcy court made the 20 following very thoughtful observation: 21 A closer inspection of the language employed in [s]ection 1124(1) reveals ‘impairment by statute to be 22 an oxymoron.’ Impairment results from what the plan 23 does, not what the statute does. A plan which ‘leaves unaltered’ the legal rights of a claimant is one which 24 by definition, does not impair the creditor. A plan which leaves a claimant subject to other applicable 25 provisions of Bankruptcy Code does no more to alter a 26 claimant’s legal rights than does a plan which leaves a claimant vulnerable to a given state’s usury laws or 27 to federal environmental laws. The Bankruptcy Code itself is a statute which, like other statutes, helps 28 1 t ao s d ie tf i ln ie m it th se cl oe ng ta rl a cr ti ug ah lt s r io gf h tp se .r s o An n’ ys , a lj tu es rt a ta is o ns u or fe ly legal rights is a consequence not of the plan but of 2 the bankruptcy filing itself. 3 American Solar, 90 B.R. at 819-20. 4 The Ultra Petroleum court noted that decisions from 5 bankruptcy courts across the country have reached the same 6 conclusion, agreeing that impairment results from what a plan 7 does, not from what a statute does. Its conclusion reinforces 8 the point: 9 We agree with PPI, every reported decision identified 10 by either party, and Collier’s treatise. Where a plan refuses to pay funds disallowed by the Code, the Code 11 - not the Plan – is doing the impairing. 12 Ultra Petroleum, 2019 WL 6318074 at *5. 13 Like the creditors in Ultra Petroleum, the Unsecured 14 Creditors’ complaint is with Congress and the Bankruptcy Code, 15 not the drafters of a Plan. The Bankruptcy Code, not the Plan, 16 limits them to the Federal Interest Rate.7 The cases cited by 17 Unsecured Creditors do not apply here, as the rights in those 18 cases were impaired by the plan and not by operation of law. See 19 Acequia, Inc. v. Clinton (In re Acequia), 787 F.2d 1352, 1363 20 (9th Cir. 1986) (shareholder voting rights altered by plan); In 21 re Rexford Properties, LLC, 558 B.R. 352, 368 (Bankr. C.D. Cal 22 2016) (creditor’s rights regarding ongoing business altered by 23 plan). 24 There is no point in discussing section 1124(2), as that 25 subsection is not relevant to the treatment of the four not 26

27 7 For the same reason, creditors who hold contractual claims calling for interest lower than 2.59% will fare better under the 28 Plan. 1 impaired classes. Were Debtors to have proposed a treatment of 2 the Unsecured Creditors’ claims that cured, reinstated, or 3 reversed any acceleration, then the analysis might be helpful. 4 But because section 1124(1) is the operative section here, that 5 ends the discussion. 6 Because the Plan leaves the Unsecured Creditors’ claims not 7 impaired, there is also no need to dwell on whether or not “fair 8 and equitable” principles apply. They do not. Unimpaired 9 Creditors, when treated as dictated by the Bankruptcy Code, are 10 not impaired by the Plan. They are conclusively presumed to 11 have accepted the Plan. Section 1126(f). Section 1129(b) is 12 not available to them.8 13 VI. CONCLUSION 14 As a trial court in the Ninth Circuit, this court is bound 15 to follow Cardelucci unless, as a matter of principled 16 reasoning, it can be distinguished. No such grounds exist. The 17 1994 amendments to section 1124 predated Cardelucci. Thus, 18 whether or not Cardelucci addressed the issue is not the point. 19 Its rule is the law of this circuit until altered either by an 20 en banc panel, the United States Supreme Court, legislation or 21 some other controlling change in the law. 22 Even were Cardelucci not controlling, this court would 23 follow the lead of PPI and Ultra Petroleum (and the lower court 24 decisions cited by Ultra Petroleum), and reject the contention 25

26 8 For this reason, the court rejects as incorrect the bankruptcy court’s reliance In re Energy Future Holdings, 540 27 B.R. 109 (Bankr. D. Del. 2015) on “equitable principles” to permit unsecured creditors in a solvent case to recover a 28 contract rate or such other rate as it deemed appropriate. 1 of Objecting Creditors that imposition of the Federal Interest 2 Rate impairs them. It is the Bankruptcy Code itself, not any 3 plan provision, that imposes that rate.9 4 The court is not concurrently entering an order consistent 5 with this Memorandum Decision as was the case with its recent 6 decision in the Inverse Condemnation action (Dkt. No. 4895). 7 Because of the close relationship between the postpetition 8 interest question and the issues presented in the forthcoming 9 Make-Whole dispute, orders disposing of them both at the same 10 time seems appropriate and efficient. Whether either or both 11 questions should be certified for direct appeal or to treated as 12 final for purposes of Fed. R. Bankr. P. 7054, can be visited 13 later. 14 ***END OF MEMORANDUM DECISION*** 15 16 17 18 19 20 21 22 23

24 9 Ultra Petroleum remanded the case to the bankruptcy court 25 to decide the appropriate Make-Whole amounts, the appropriate 26 postpetition interest rate, and the applicability of the solvent-debtor exception. If the three judges on the Fifth 27 Circuit panel had been members of the Ninth Circuit, there is no doubt they would have been bound by Cardelucci, thus limiting 28 the remand to the Make-Whole issue.