Case Study: In Re 785 Partners

Law360, New York (September 18, 2012, 12:32 PM EDT) -- Although the general rule is that creditors are not entitled to post-petition interest and fees, that is not necessarily the case for an over-secured lender. In 785 Partners[1], the lender held a secured loan with a principal balance of approximately $81 million, which was secured by a building with a market value of $91.7 million and an escrow fund of approximately $18 million, making the loan over secured.

A payoff letter showed a balance due of $100,845,002.80, including approximately $6.7 million in regular interest, $8 million...
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