Bankruptcy Restructuring and Guarantee Liability: Issues for Debtors, Borrowers, Lenders, and Third-Party Creditors
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Bankruptcy
- event Date
Tuesday, April 2, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
-
This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will discuss the legal and economic issues related to the treatment and enforcement of personal and intercorporate guarantees before, during, and after bankruptcy or confirmation, in the context of frequently occurring scenarios.
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.
With experience in a broad range of industries, including healthcare, hospitality, food and beverage, manufacturing, retail, technology, transportation, and banking, Mr. Prescott helps businesses and individuals accomplish their goals by working closely with his clients and their advisors to understand the specifics of each situation and provide creative, cost-effective solutions to complex problems, both inside and outside of the courtroom.
In the corporate context, whether representing the primary obligors or the guarantor, counsel negotiating and drafting guarantees must keep in mind that the bankruptcy of any party to the agreement can significantly affect the rights and remedies of all. Intercorporate guaranties, including upstream, downstream, and cross-stream guaranties, and guaranties in fund finance present unique and complex problems in bankruptcy.
As to personal guarantees, guarantors often mistakenly believe that they are guaranteeing only against certain enumerated and affirmative bad acts by the borrower-debtor, only to discover that the obligations are more extensive. On the other hand, if the debtor is the guarantor, the borrower and its creditors may have to wait years before they have access to the assets of the guarantor to collect on a judgment against an affiliated borrower. The existence of a guarantee also raises a series of complex and challenging issues relating to whether such a pre-petition guarantee can be enforceable after discharge.
Listen as this experienced panel of bankruptcy lawyers offers best strategies and practices for enforcing guarantees affected by bankruptcy.
- Types of guarantees and relevance to bankruptcy
- Applicability of the automatic stay
- Impact of various claim limits in bankruptcy on guarantees
- Multiple guarantees of the same obligation against multiple debtors
- Effect of confirmation, including third-party releases
- Options under Subchapter V of Chapter 11
The panel will discuss these and other important issues:
- When is a guaranty claim reduced by recovery in a debtor's bankruptcy case?
- How many claims do you have if you have multiple guaranty claims by multiple debtor subsidiaries, just one or multiple claims in each subsidiary debtor?
- Are bad boy guarantees triggered by bankruptcy enforced?
- What happens if the business later incurs additional obligations after the business owner received a bankruptcy discharge?
Related Courses
Chapter 11 Fundamentals: Debtor-In-Possession Financing and Use of Cash Collateral
Friday, May 16, 2025
1:00 p.m. ET./10:00 a.m. PT
Intersection of Bankruptcy and State Foreclosure Laws
Available On-Demand