United States First Circuit

In a bankruptcy dispute over a commercial lender's right to receive a bargained-for prepayment penalty from a solvent debtor, judgment for debtor is reversed where, regardless of reasonableness, an oversecured creditor may be entitled to collect bargained-for prepayment penalties as the functional equivalent of unsecured debt. The matter is remanded to the bankruptcy court to determine whether the prepayment penalties are enforceable under section 502 of the Bankruptcy Code.

Appellate Information

• Decided 08/30/2007
• Published 08/30/2007

Judges

• SELYA, Senior Circuit Judge., Before BOUDIN, Chief Judge, SELYA, Senior Circuit Judge, and HOWARD, Circuit Judge.

Court

• United States First Circuit

Counsel

• For Appellant:
  
• Edward J. Pontacoloni, with whom Barbara A. Frederick, Updike, Kelly & Spellacy, P.C., Thomas J. Cronin, and Gunning & LaFazia, Inc. were on brief, for appellant.


• For Appellees:
  
• Christopher M. Mulhearn, with whom Ferrucci Russo P.C. was on brief, for appellee.