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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Banking and Finance

Date & Time
  • event Date

    Tuesday, March 11, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will provide finance counsel with an analysis of the enforceability of loan guaranties, including bad boy carveouts, in loan default and bankruptcy scenarios. The panel will also discuss potential liabilities for the lender and common defenses asserted by borrowers and guarantors.

Faculty

Meryl Diamond
Director
McCoy & Orta, PC

Ms. Diamond focuses her practice on commercial real estate finance. She has extensive experience in, and her practice involves, the representation of national banks, debt funds and other institutional lenders in all aspects of the origination, purchase, and sale of portfolio and securitized (both conduit and SASB) commercial mortgage loans, mezzanine loans, syndicated loans, subordinate notes and participation interests secured by commercial real estate properties in all 50 states consisting of all asset types including large, complex single and multi-property transactions and the representation of lenders, servicers and asset managers in connection with restructuring, workouts and foreclosures of both mortgage and mezzanine loans.

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Matthew D. Parrott
Partner, Co-Head Real Estate Litigation Group
Fried Frank Harris Shriver & Jacobson LLP

Mr. Parrott concentrates his practice in the representation of commercial lenders and other parties in disputes and transactions involving sophisticated real estate structures, financings, workouts, mortgage and UCC foreclosures, restructurings, joint venture disputes, acquisitions and dispositions of all asset classes of real estate. The firm’s real estate and real estate finance clients routinely engage him to handle their most complex and difficult litigation matters. Mr. Parrott is recognized as one of the nation’s top commercial finance and real estate litigation attorneys by multiple industry sources and regularly writes and presents on industry topics.

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Description

The loan guaranty agreement is often heavily negotiated but quickly forgotten after closing a commercial loan transaction--until the loan is in trouble. Enforcement of loan guaranties can involve various issues, particularly in the context of a loan default or the borrower's bankruptcy.

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 and borrower's counsel should make sure that recourse carveouts are drafted clearly and concisely in order to limit the borrower's recourse liability.

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 drafting guaranty instruments and nonrecourse carveout provisions.

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
  5. Drafting loan guaranties and carveout provisions

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?