The treatment of prepayment premiums in bankruptcy has gained substantial attention in several recent bankruptcy cases. In some sense, seeking allowance of a prepayment premium is a “good problem to have” from the lender's viewpoint, because in most bankruptcy cases, lenders are facing a substantial write-down on their prepetition loans.
The Enforceability of Make-Whole Premiums in Bankruptcy
The treatment of prepayment premiums in bankruptcy has gained substantial attention in several recent bankruptcy cases. But in a situation where the borrower has the funds to repay the loan, there is frequently a dispute between lenders and unsecured creditors or equityholders who are looking at less than a full recovery on their claims.
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Gary B. Rosenbaum, Jeremy R. Johnson And Gregory KopaczThis premium content is locked for The Bankruptcy Strategist subscribers only
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