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A Cure By Any Other Name
Section 1123 (a)(5)(G) of the Bankruptcy Code provides that, “[n]otwithstanding any otherwise applicable nonbankruptcy law, a plan shall ' provide adequate means for the plan's implementation, such as ' curing or waiving of any default.” But what, exactly, does it mean to cure a default?
The concept of a “cure” ' both in life and law ' suggests a return to the status quo: What once was ill is ill no longer. However, courts have struggled to come to a consensus on the meaning of cure. With respect to a secured loan, we are all familiar with two standard remedies afforded to a lender as a cure for a sick loan ' default interest and late fees. The question has long been the extent to which a secured lender remains entitled to one or both of these remedies as a condition to cure in a confirmed Chapter 11 plan.
Historical Background
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