Nonrecourse Carve-Outs and Bad-Boy Guaranties: Negotiating, Enforcing and Litigating These Terms, Avoiding Pitfalls
Avoiding or Resolving Lender and Guarantor Disputes in and Outside of Bankruptcy
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will offer corporate finance, bankruptcy and real estate counsel an opportunity to hear about the key aspects of negotiations that lead to the creation of a bad-boy guaranty, and some of the pitfalls each side can run into in these negotiations. The panel will first review commonly used carve-outs in nonrecourse clauses, analyze operative provisions in bad-boy guarantees, and discuss significant court cases. The panel will then discuss the case law that has developed as a result of litigation over the enforceability of the bad-boy guarantees, the defenses that courts have accepted and rejected, and lastly the impact of the bankruptcy of either the direct obligor or the guarantor on the enforceability of the bad-boy guaranty.
Outline
- Negotiating over the "springing recourse" and bad-boy guarantees
- Single-purpose entity/separateness: requirements and violations
- Substantive consolidation in bankruptcy
- Other
- Nonrecourse carve-outs
- Carve-outs from A to Z
- Environmental indemnities
- Recent case law concerning nonrecourse loans
- Sample provisions
- Litigation over bad-boy guaranties
- Enforceability of bad-boy guaranties
- Legislation by states affecting bad-boy guarantees
- Available defenses to enforceability
- Bankruptcy implications on enforceability of bad-boy guarantees
Benefits
The panel will review these and other relevant issues:
- What are the types of nonrecourse carve-outs? How should counsel approach them?
- What are the legal and practical ramifications for the guarantor of a defaulted loan under a carve-out guaranty?
- What are the principal strategies for resolving disputes involving these provisions?
- How have these provisions been treated in bankruptcy? What are some strategies for resolving disputes in bankruptcy?
Faculty
Paul Fisher
Of Counsel
Aronberg Goldgehn Davis & Garmisa
Mr. Fisher concentrates his practice in hospitality law, health care law and commercial real estate. He is general... | Read More
Mr. Fisher concentrates his practice in hospitality law, health care law and commercial real estate. He is general counsel to an international hotel company. Mr. Fisher represents clients in the acquisition, sale, leasing and financing of hotels, medical facilities, office buildings, and retail properties. He works extensively on the restructuring of commercial debt and commercial ventures, purchase of commercial debt, private equity transactions, bank regulatory matters and multiemployer pension fund liability. Mr. Fisher has also served as an expert witness in a variety of matters related to commercial lending and HUD regulation.
Close
Kyung S. Lee
Partner
Shannon & Lee
Mr. Lee practices in the area of debt restructuring and corporate reorganizations. He has served as debtor's... | Read More
Mr. Lee practices in the area of debt restructuring and corporate reorganizations. He has served as debtor's counsel for companies in the airline, real estate, oil and gas, communications, healthcare, distribution, manufacturing and convenience store industries. He has also represented lenders, creditors, creditors' committees and investors involved in workouts and Chapter 11 reorganizations as well as litigating on behalf of the various parties. He has extensive experience working closely with senior management and financial advisors on valuation of enterprises and assets and development of turnaround and restructuring business plans.
Close