Supreme Court of the United States · Official docket →
The Hertz Corporation, et al. v. Wells Fargo Bank, N.A., as Indenture Trustee, et al.
Paid petition · United States Court of Appeals for the Third Circuit, No. 23-1169, 23-1170 · judgment November 6, 2024
Before the decision, modestly above the 4.1% base rate. The model weighted this up for counsel who has won certiorari before, a Third Circuit decision below, and a business petitioner, and down for a business respondent.
Question presented
The Bankruptcy Code disallows claims for “unmatured interest,” i.e., claims for interest that has not yet accrued when the bankruptcy petition is filed. 11 U.S.C. §502(b)(2). In the decision below, the Third Circuit unanimously (and correctly) held that this provision by its terms disallows respondents’ claim for some $147 million in “make-whole” premiums that were designed to compensate respondents for future unmatured interest. But a two-judge majority then went on to hold that an unwritten “common law absolute priority rule” derived from pre-Code judicial practice overrides the plain statutory text in solventdebtor cases, and allowed respondents to recover from petitioners both that $147 million in make-whole premiums and an additional $125 million in postpetition interest. The decision below is the third in as many years to hold, over vigorous dissent in each case and in conflict with numerous other courts, that a judicially-created pre-Code exception supersedes the plain language of the Bankruptcy Code and permits creditors in solvent-debtor cases to recover amounts that the Code expressly disallows—and the decision below reached that unlikely result by relying on a theory that no other court has adopted and no party below raised. The question presented is: Whether an unwritten pre-Code exception overrides the Bankruptcy Code’s express statutory text and allows creditors in solvent-debtor cases to recover amounts that the Code explicitly disallows.
Counsel of record
For petitioner
Paul D. Clement
Clement & Murphy, PLLC
For respondent
Christopher May Mason
Nixon Peabody LLP
Proceedings
- Jan 12 2026Petition DENIED. Justice Kavanaugh would grant the petition for a writ of certiorari.
- Dec 23 2025DISTRIBUTED for Conference of 1/9/2026.
- Dec 23 2025Supplemental brief of petitioners The Hertz Corporation, et al. filed. (Distributed)
- Dec 03 2025Brief amicus curiae of United States filed.
- Jun 02 2025The Solicitor General is invited to file a brief in this case expressing the views of the United States.
- May 13 2025DISTRIBUTED for Conference of 5/29/2025.
- May 13 2025Reply of petitioners The Hertz Corporation, et al. filed. (Distributed)
- Apr 29 2025Waiver of right of respondent U.S. Bank, National Association, as Indenture Trustee to respond filed.
- Apr 29 2025Brief of respondent Wells Fargo Bank, N.A., as Indenture Trustee in opposition filed.
- Apr 04 2025Petition for a writ of certiorari filed. (Response due May 8, 2025)
- Feb 24 2025Application (24A706) granted by Justice Alito extending the time to file until April 5, 2025.
- Feb 19 2025Response to application from respondent Wells Fargo Bank, N.A., as Indenture Trustee filed.
- Feb 18 2025Application (24A706) to extend further the time from March 6, 2025 to April 5, 2025, submitted to Justice Alito.
- Jan 21 2025Application (24A706) granted by Justice Alito extending the time to file until March 6, 2025.
- Jan 17 2025Response to application from respondent Wells Fargo Bank, N.A., as Indenture Trustee filed.
- Jan 15 2025Application (24A706) to extend the time to file a petition for a writ of certiorari from February 4, 2025 to March 6, 2025, submitted to Justice Alito.