Nonrecourse Carve-Outs, Bad-Boy Guaranties, and Personal Liability

Avoiding or Resolving Lender and Guarantor Disputes in and Outside of Bankruptcy

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

Conducted on Tuesday, January 5, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will offer real estate and finance counsel an examination of some of the more troublesome provisions at the heart of disputes between borrowers and lenders. The panel will review commonly used carve-outs in nonrecourse clauses, analyze operative provisions in bad-boy guaranties, and discuss significant court cases, including Cherryland and its progeny. The panel will outline strategies for avoiding and resolving disputes involving these provisions.


Despite many commercial loans characterized as "nonrecourse," most lenders require that a guarantor with sufficient net worth stand behind certain of the borrower's obligations under the loan. Such guarantors often believe that they are guarantying only against affirmative bad acts by the borrower, but lender recourse obligations often go beyond just "bad boy" carve-outs.

Counsel to borrowers and lenders must anticipate the harsh pitfalls in using carve-outs in so-called nonrecourse loans and must understand the operative provisions of the "springing recourse" and bad-boy guaranties.

Listen as our authoritative panel of real estate and bankruptcy attorneys explains recent legal developments in the use and enforcement of commercial real estate loan guaranties, carve-outs in nonrecourse provisions, and Cherryland and other current case law. The panel will also discuss strategies for resolving disputes involving these provisions.



  1. "Springing recourse" and bad-boy guaranties
    1. Single-purpose entity/separateness: requirements and violations; Cherryland
    2. Substantive consolidation in bankruptcy
    3. Other
  2. Nonrecourse carve-outs
    1. Carve-outs from A to Z
    2. Environmental indemnities
    3. Recent case law concerning nonrecourse loans
    4. Sample provisions
  3. Bankruptcy perspective


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?


Lee, Kyung
Kyung S. Lee

Parkins Lee & Rubio

Mr. Lee practices in the area of debt restructuring and corporate reorganizations. He has served as debtor's...  |  Read More

Lubinski, Joseph
Joey E. Lubinski

Husch Blackwell

Mr. Lubinski is a member of the firm’s Real Estate, Development and Construction team. His varied transactional...  |  Read More

Small, William
William S. Small

Enenstein Law

Mr. Small is a nationally recognized real estate lawyer with over 38 years of experience successfully handling a broad...  |  Read More

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