Mere Acceleration Does Not Trigger Prepayment Premium

Law360, New York (February 18, 2014, 2:35 PM EST) -- The U.S. Court of Appeals for the Fifth Circuit held on Jan. 27, 2014, that a lender’s acceleration due to a borrower’s payment default did not trigger a prepayment premium. In re Denver Merchandise Mart Inc., *1 (5th Cir. Jan. 27, 2014). Affirming the lower courts’ application of state law, the court held that “the plain language of the contract does not require the payment of the prepayment consideration in the event of mere acceleration.” Id. at *5.

Relevance

Prepayment premiums, also known as “make-whole” provisions,...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.