Is a facility fee for a loan a penalty?
In Aodhcon LLP v Bridgeco Ltd the claimant entered into a bridging loan with the defendant in relation to its property development business. When the term of the bridging loan expired, the property had to be sold by the defendant as mortgagee in possession.
The claimant issued proceedings claiming, among other things, that the facility fee for arranging the loan was a penalty. The relevant provision of the offer provided that a facility fee of 1.25 per cent per month calculated on the balance outstanding as at each month anniversary of the drawdown would be debited from the account and would be payable on redemption. However, it further provided that the defendant would waive its rights to collect the facility fee if there were no arrears of interest or any other breaches of the terms and conditions of the offer, including the claimant’s failure to repay the loan at the end of the term…
Click on the link below to read the rest of the Wragge & Co briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Wragge Lawrence Graham & Co
News from The Lawyer
Briefings from Wragge Lawrence Graham & Co
An essential guide to getting ‘pensions ready’ in a month.
From 6 April 2016 the Annual Allowance for those with ‘adjusted incomes’ over £150k will be reduced down to a minimum of £10k. ‘