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Ultra Petroleum Aftermath: Make-Whole and No-Call Provisions in Bankruptcy

OnDemand Webinar (89 minutes)

Gain a better understanding of bankruptcy case law developments and offer best practices for lenders to protect these claims.Many banks are perplexed by the inconsistent treatment of make-wholes (otherwise known as prepayment premiums) in bankruptcy. Sometimes they are enforced, and sometimes not, for reasons that are difficult to reconcile. This information will help banks and their advisors understand the factors that courts consider when they decide whether to enforce make-wholes in bankruptcy, allowing them to draft better provisions and evaluate the risks associated with existing provisions.

Authors

Brian Hulse, Davis Wright Tremaine LLP Hugh McCullough, Davis Wright Tremaine LLP

Agenda

Anatomy of a Prepayment Premium (Otherwise Known as Make-Wholes)

• What Is It and Why They Might Be Enforceable

• How It Works

• Examples

Prepayment Premiums Under Applicable Nonbankruptcy Law

• Classifying Them as Interest, Liquidated Damages, or Something Else

• Enforceability

Arguments Used to Challenge Prepayment Premiums

• Reasonable Estimate of Actual Damages (or Not)

• Penalty Rather Than Estimate of Damages

Prepayment Premiums in Bankruptcy

• State Law and Its Application in Bankruptcy

• Bankruptcy Provisions Affecting Application of State Law

Ultra Petroleum and Its Effect on the Analysis