IN RE PARAGON INVESTMENT LLC

EILEEN HOLLOWELL, Bankruptcy Judge

Pending under advisement is the parties' disagreement regarding whether creditor, Audrey Martin ("Martin"). is entitled to charge the Debtor a 10% compound interest rate on an obligation which matured prepetition ("Martin Note"). The terms of the Martin Note provided for payment of 10% interest "upon default or maturity" and further provided that interest, not paid when due, would be compounded. Because the terms of the Debtor's confirmed plan of reorganization cure the default on the Martin Note, all the consequences of default were nullified. In re Udhus, 218 B.R. 513, 515 (9th Cir. B.A.P. 1998); See also Entz-White Lumber and Supply, Inc., 850 F.2d 1338, 1340 (9th Cir. 1958). In this case, as in Entz-White, the Martin Note had matured prior to the filing of the bankruptcy case, but the Entz-White court specifically rejected the notion that post-maturity interest is not the consequence of a default Id at 1340, n. 2.

Martin argues that the 1994 Amendments to Section 1 123(d) of the Bankruptcy Code may have legislatively overwritten theEntz-White holding. That argument was examined and rejected inIn re Phoenix Business Park Ltd., 257 B.R. 517, 521 (Bankr. D. Ariz. 2001). The Phoenix Business Park analysis is persuasive, therefore,Entz-White remains good law in the Ninth Circuit.

Martin also argues that her note's 10% post maturity rate of interest should be allowed because it is allegedly below market rate. This argument fails because Entz-White permits interest to be set at the market rate of "at the pre-default rate provided for in the contract." Entz-White, 850 F.2d at 1343. The Debtor's confirmed plan sets the Martin Note interest rate at the pre-maturity/default simple interest rate of 9%. After curing the default, Debtor is not required to pay more than the Martin Note's non-default rate of interest. An order consistent with the holding in this Memorandum Decision will be entered this date.