Stipulate—and Lose? The Danger of Relying on Casualty Values, Part I
It used to be so easy. Lessors would attach schedules of casualty values and early termination values to an equipment lease agreement. These values typically were expressed as a percentage of the lessor’s cost of the items of equipment suffering a casualty or for which the lessee was terminating the lease in advance of the scheduled expiration date. Both parties would agree on these schedules, which seldom arose in practice because casualties were infrequent and the parties often would negotiate for a new lease of upgraded or substitute equipment to avoid paying the full termination value. But a recent oral decision by a Bankruptcy Court judge in the District of Delaware has cast doubt on the use of casualty values in a default context.
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“Stipulate—and Lose? The Danger of Relying on Casualty Values,” by Stephen T. Whelan was published in the 2018 Monitor 100 (Vol. 45, No. 4). Reprinted with permission.