Untitled Document

2015 Commercial Law Developments, Prepared by the Business Law Section Commercial Transactions Committee for the 2015 Business Law Section Annual Report
III. Guaranties

  • JPMorgan Chase Bank v. Winget, 2015 WL 728060 (6th Cir. 2015) – A guaranty would not be reformed in absence of a mistake of fact or scrivener’s error.

  • Hawkins v. Community Bank of Raymore, 2014 U.S. App. Lexis 15006 (8th Cir. 2014), [petition for cert. granted, 2014] – Equal Credit Opportunity Act protections do not apply to spousal guarantor who is not an ‘applicant’ under the ECOA but is merely a guarantor. The text of the ECOA is clear that a person does not qualify as an ‘applicant’ merely by executing a guarantee.

  • 136 Field Point Holding Company v. Invar International Holdings, _ F.Supp.2d _ (SDNY 2015) – Guarantor waivers sufficient to make claim under guaranty enforceable, even if guarantied obligation itself is not enforceable (as a penalty).

  • In re Adamson Apparel (Stahl v. Simon), _ F3d _ (9th Cir 2015) – Guarantor’s bona fide waiver of indemnification means it’s not a ‘creditor’ and not exposed to preference. The bankruptcy issue involved in the case hinged on whether a guarantor ‘deferred’ or instead ‘waived’ his reimbursement claim against the borrower in the circumstance where the guarantor had paid the guaranteed debt. The security agreement said that the guarantor had ‘defer[red]’ his claim, while the guaranty itself said that he ‘irrevocably waive[d]’ his reimbursement claim. The court, citing the usual NY authorities that the court must review the contract ‘as a whole’, stated: ‘Here, the district court properly concluded that the discrepancy discussed above creates an ambiguity as to whether [the guarantor’s] … right to indemnification was fully waived. One set of documents says that the right is simply deferred until [the lender] … has been fully paid, while the other set of documents says that the waiver is unconditional. Because these two positions are inconsistent, we find no error in the district court’s remand of the case to the bankruptcy court to resolve the ambiguity.’

IV. Fraudulent Transfers | Table of Contents