Fifth Circuit Addresses Enforceability of Prepayment Premiums

, New York Law Journal

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In their Bankruptcy Practice column, John J. Rapisardi and Joseph Zujkowski of O'Melveny & Myers write that in January, the Fifth Circuit joined other jurisdictions in reflecting a hesitancy on the part of bankruptcy courts to enforce prepayment premiums absent explicit language in prepetition debt instruments mandating payment of such premiums following commencement of a bankruptcy case or acceleration occasioned by another event of default.

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