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Financing commercial real estate transactions on a nonrecourse basis has become common practice in virtually all jurisdictions in the United States. But lenders typically mitigate the risk associated with issuing nonrecourse debt by requiring a creditworthy entity or individual to personally guaranty either the lender’s losses or the entire debt when certain events take place. These triggers—commonly known as “bad boy” events or “nonrecourse carve-outs”—can expose the guarantors to significant deficiency judgments when the value of the collateral falls short of covering the total debt obligations.
Parties often negotiate bad boy guaranties without a complete understanding of how courts will interpret or enforce them. In this new webinar for Bloomberg BNA, Manatt will provide lenders, borrowers, investors and their legal counsel with an overview of the leading cases on this topic as well as practical tips on how to avoid common misconceptions and pitfalls in drafting and negotiating bad boy guaranties.
Key topics will include:
- The purposes of bad boy guaranties, and how to draft them to achieve those purposes
- Common provisions in bad boy guaranties, and how courts have enforced or not enforced the applicable language
- The distinction between full recourse and actual loss as those terms are used in bad boy guaranties
- Seminal cases related to bad boy guaranties
Presenters
Barry Lee, Partner, Co-chair, Financial Services Litigation and Enforcement
Jubin Meraj, Partner, Real Estate
Date and Time
The webinar was held Wednesday, Oct. 18, 2017.
First-time users of Bloomberg Next—the website this content is available on—will have to sign up for a Bloomberg Next account to view this webinar. Registration is free and easy. After users sign up, the webinar can be found by searching for its title in the Bloomberg Next catalog.
If you would like to receive an audio transcript of this webinar due to accessibility issues, please email us at webinars@manatt.com.
This program does not constitute legal advice, nor does it establish an attorney-client relationship. Views expressed by presenters are strictly their own and should not be construed to be the views of Manatt or attributed to Manatt.