On April 4, 2026, the U.S. Bankruptcy Court for the Southern District of New York (the court) in In re 33 Mako, Case No. 25-11256, addressed the issue of whether an oversecured creditor may recover post-petition default interest under Section 506(b) of the Bankruptcy Code.
Beyond Dollar-for-Dollar Harm: SDNY Bankruptcy Court Narrows the Path to Disallowing Contractual Default Interest
In In re 33 Mako, the U.S. Bankruptcy Court for the Southern District of New York addressed the issue of whether an oversecured creditor may recover post-petition default interest under Section 506(b) of the Bankruptcy Code. In denying the debtor’s motion, the opinion offers meaningful guidance on the application of the five-factor equitable test used to evaluate default interest claims and clarifies how courts should weigh each factor.
By
Lawrence J. Kotler and Marie Bauer
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