Exploding and Springing Insider Guarantees of Real Estate Loans
Marvin Leon
PROBATE& PROPERTY JANUARY/FEBRUARY 2004 57 During the past two decades, real estate lenders have been using a device known as exploding or springing guarantees by insiders as a means of discouraging borrowwer from filing bankruptcy. The benefits sought may be illusoory however, as courts consider a variety of legal challenges to the enforceability of these guarantees. This article discusses the rise in use of these types of guarantees and the legal theory most likely to lead to their demise...