Commercial Loan Guaranties: Drafting and Enforcing Corporate and Personal Guaranties and Non-Recourse Carve-Outs

Best Practices for Lenders and Guarantors In and Outside Bankruptcy

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, March 20, 2019

Recorded event now available

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Program Materials

This CLE webinar will provide finance counsel with an analysis of the enforceability of loan guaranties, including bad boy agreements in bankruptcy. The panel will also discuss potential liabilities for the lender and common defenses, and outline best practices for lenders and guarantors to enforce and defend guaranty agreements.

Description

The loan guaranty agreement is often heavily negotiated by quickly forgotten after the closing of a commercial loan transaction—until the loan is in trouble. Enforcement of loan guaranties can involve a variety of hotly contested issues, particularly in the context of a bankruptcy of the borrower or the guarantor.

Commonly litigated issues for personal guaranties include the validity of the agreement, waiver of defenses, the continuing nature of the guaranty, and whether it is revocable or a sham guaranty. Bad boy guaranties, which seek to attach recourse liability on guarantors for engaging in specified prohibited acts, have given rise to a separate body of litigation.

Bad boy guaranties triggered as a consequence of a bankruptcy filing have generally been upheld, although the uncertainties from the Cherryland/Chesterfield rulings in the real estate financing context continues.

Listen as our authoritative panel of commercial finance attorneys discusses the enforceability of loan guaranties, potential liabilities and defenses, and best practices for both parties in enforcing and defending these agreements.

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Outline

  1. Contested loan guaranties and recent court decisions
  2. Enforcement and liability issues from the lender’s perspective
  3. Defenses and liability issues from the guarantor’s perspective
  4. Impact in the context of bankruptcy

Benefits

The panel will review these and other key issues:

  • In what situations will lack of consideration be a viable defense to enforceability?
  • What lender liability risks are inherent in dealings with a guarantor?
  • What legal and business strategies can lenders employ to maximize their recovery?
  • What has been the impact of bad boy guaranties in a distressed debtor’s restructuring option?

Faculty

Diamond, Meryl
Meryl P. Diamond
Partner
Alston & Bird

Ms. Diamond focuses her practice on commercial real estate finance. She represents national commercial banks,...  |  Read More

Hayhurst, Ren
Ren R. Hayhurst
Founder
Ren RH Legal Consultants

Mr. Hayhurst’s professional life has focused for over 30 years on all aspects of lender and borrower...  |  Read More

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