Guarantor Liability 101

Originally recorded on October 2, 2014, this program provides a practical overview on loan guaranties from the litigator’s perspective. It covers both guaranty basics and more advanced topics, such as recourse carve-outs and applicability of state anti-deficiency laws. Guaranty issues are addressed from the perspective of both lender and guarantor. The program’s particular focus is whether the lender may enforce its guaranty in common factual scenarios and, correspondingly, whether the guarantor has any credible defenses to enforcement. We will review commonly litigated guaranty issues, including validity of the guaranty agreement, waiver of defenses, the continuing guaranty, irrevocable guaranties, assignments, and the “sham” guaranty. The course is designed ultimately to enable lawyers to draft lawful guaranties, effectively advise clients on their rights and obligations under a guaranty agreement, and litigate guaranty disputes to successful conclusion.

Key topics to be discussed:

  • The Basics of Suretyship and Guaranty
  • Waiver of Suretyship Defenses
  • Applicability of State Law Anti-Deficiency Protections
  • Recourse Carve-Outs (the so-called “bad boy” guaranty)
  • Drafting an Effective and Enforceable Guaranty (and avoiding common mistakes)
  • Defenses to Enforcement
  • Guaranty Litigation – strategic, tactical, and practical considerations

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