In re Holmes (02-52793)
The debtor executed a promissory note that provided in part for (1) an eighteen percent per annum default rate of interest; (2) prepayment premiums; and (3) payment of reasonable attorney's fees, costs and expenses if the obligation was referred to an attorney for collection. The creditor's claim was over secured and the estate was insolvent. The Court held that the creditor was entitled to the eighteen percent default rate. The Court held that the creditor had failed to show that the prepayment premium was reasonable. The Court disallowed the creditor's claim for interest on attorney fees because the promissory note did not provided for that interest.
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Friday, July 1, 2005