Although not exactly the question that Hamlet was contemplating, it is one on the minds of many lenders. Perhaps more accurately posed is whether or not the exercise of remedies by a lender following a non-monetary event of default is enforceable.

This question was undertaken by the bankruptcy court in its modified bench ruling for In re 53 Stanhope LLC, 625 B.R. 573 (Bankr. S.D.N.Y. 2021). The secured lender of several related borrowers opposed their restructuring plan on the basis that it did not include sufficient funds to pay default interest for both pre- and post-petition defaults. The borrowers, on the other hand, argued that several of the defaults alleged by the lender were not in fact defaults or did not justify acceleration or default interest.