Articles

Ponto, Ozturk Author Chapter for Norton Annual Survey of Bankruptcy Law on Allowability of Make Whole Premiums

Articles / October 12, 2016

Partner Geraldine Ponto and Associate Ferve Ozturk published a summary of case law on the allowability of make whole premiums in bankruptcy for the 2016 edition of the Norton Annual Survey of Bankruptcy Law. The decisions they discuss set forth the general principles that apply in determining whether and under what circumstances claims for make whole premiums are allowable in Chapter 11 cases. They write:

The more recent decisions have injected needed certainty into the bond market by demanding specific and certain contract language entitling noteholder to a make whole premium upon acceleration of the notes caused by a borrower’s bankruptcy filing. These decisions also provide guidance to parties who are negotiating debt terms or analyzing debt purchases. An awareness of these developments is imperative for all lenders and borrowers in distressed markets.