Break Fee

(redirected from Break Fees)

Break Fee

1. In a contract between two parties, an amount of money one party may pay the other in order to agree to dissolve the contract. In many cases, the amount of the break fee is contained in the contract itself. It may diminish over time, depending on the nature of the contract. Break fees are common in leases.

2. In mergers and acquisitions, a fee the target pays to the acquirer in case a deal fails before completion. Theoretically, this is done to reimburse the acquirer for due diligence expenses, but, in practice, it is often used to attempt to restore good relations between the two companies.
Mentioned in ?
References in periodicals archive ?
If they broke the contract, they would be hit with break fees of between 20 percent and 40 percent of the principal of the loan.
Traditionally, break fees have been more common in the context of public takeovers (i.
Cuenta Controlada can be used to support a variety of corporate situations that involve cash only deposits including settlement of large mergers and acquisitions, good faith deposits or break fees, disbursement of milestone payments relating to a project and other situations.
Businesses may use the service to support a wide range of transactions, including settlement of mergers and acquisitions, good faith deposits or break fees, disbursement of milestone payments related to a project, holdbacks or earnings premiums in a business purchase, and legal or banking fees in a workout.
If the company turns down the offer, it will need to pay break fees of up to GBP11.
For example, do break fees decrease inversely proportional to size of the bid?
The size of reverse break fees related to financing failures increased, even as the size of traditional break fees declined.
Farmers said that the bank marketed the swaps as similar to fixed rate agreements, but increased margins on top of underlying swap rates and charged break fees through 2008 and 2009.
The two banks were chided for the formula that they use to calculate break fees to the middle of last year, which is said to have had 'technical deficiencies.
The Company is reviewing its entitlement to break fees under the letter of intent.
Break fees and expenses are payable by MessagingDirect in certain circumstances if the agreement is terminated.
Jorex has agreed not to provide to any party other than Cypress further break fees or payments unless the cash consideration is in excess of $0.