Abstract This case considers ethics and agency theory issues presented by an early extinguishment of debt. An electric utility company retired $50 million par of mortgage bonds employing a never-previously-exercised, unique, early retirement provision. This provision allowed the issuer to force early retirement of bonds selling at a premium at par value as opposed to the call price. The case presents the need for financial managers to consider nonfinancial factors in the process of making financial decisions. The case is based on actual class-action litigation brought by the bondholders. The case is directed to a master's level course, an executive development program, or an upper-division undergraduate course in management accounting.