Bankruptcy Restructuring and Guarantee Liability: Issues for Debtors, Borrowers, Lenders, and Third-Party Creditors

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.

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.