Non-Recourse Carve Outs: Avoiding Common Pitfalls In Drafting and Negotiating Bad Boy Guaranties

recording Non-Recourse Carve Outs: Avoiding Common Pitfalls In Drafting and Negotiating Bad Boy Guaranties

You Will Learn:

• Types of non-recourse carve outs and how to draft them
• Legal and practical ramifications for the guarantor of a defaulted loan under a carve-out guaranty
• Key strategies for avoiding and resolving disputes involving these provisions
• Best practices for analyzing operative provisions in bad-boy guaranties

Access the pre-recorded audio conference
$365.00
 

Are non-recourse carve-outs and bad boy guaranties enforceable?

Financing commercial real estate transactions on a non-recourse basis is common practice. Most lenders mitigate the risk associated with issuing non-recourse debt by requiring guaranties against the lender’s losses or the entire debt when certain events take place.

These “bad boy” events or “non-recourse carve-outs” are some of some of the most troublesome provisions at the heart of disputes between borrowers and lenders. Why? Because parties often negotiate “bad boy” guaranties without a complete understanding of how courts will interpret or enforce them.

Learning Objectives

This CLE webinar offers legal counsel practical tips and best practice strategies on how to avoid common pitfalls in drafting and negotiating bad boy guaranties.

  • Types of non-recourse carve outs and how to draft them
  • Legal and practical ramifications for the guarantor of a defaulted loan under a carve-out guaranty
  • Key strategies for avoiding and resolving disputes involving these provisions
  • Best practices for analyzing operative provisions in bad-boy guaranties
  • Recent court cases and how courts generally interpret or enforce “bad boy” guaranties
  • Specific events that will trigger limited liability
  • Strategies for resolving disputes in bankruptcy
  • The operative provisions of “springing recourse” and bad-boy guaranties
  • Common enforceability issues and how to avoid them

Product ID: 17372

Learn Key Strategies for Avoiding and Resolving Disputes Involving these Provisions

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Faculty

Lorne W. McDougall
Lorne W. McDougall
Partner, Locke Lord LLP

Lorne McDougall is a Partner in the Firm's Real Estate Department and is resident in the Boston office. He advises lenders, developers, entrepreneurs, funds and investors in connection with the acquisition, disposition, ownership, use, financing, development, construction, and leasing of commercial real estate. Mr. McDougall has been a member of various Senior Management Committees of the firm for over 10 years.

Learn Key Strategies for Avoiding and Resolving Disputes Involving these Provisions

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