Article: District Court Overturns 2006 Adelphia Bankruptcy Court Decision That Denied Lenders The Right To Recover Corrected And Increased "Grid Interest" After Borrower's Original Certified Financial Information Was Discovered To Be False.(Case overview)

The amount of interest to which lenders are entitled under "grid interest" formulas in loan and credit agreements should be based on the borrower's actual and accurate financial information rather than financial information reported by borrower on compliance certificates and the like. So decided the U.S. District Court for the Southern District of New York in an appeal from a 2006 decision of the Bankruptcy Court in the Adelphia Communications bankruptcy case. The Bank of Nova Scotia and Citibank, N.A. v. Adelphia Communications Corporation and The Official Committee of Unsecured Creditors (06- Civ. 4983 JGK), 2008 WL 3919198 (S.D.N.Y. Aug 22, 2008) (In re ...

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