What's the legal position as regards a guarantee if the gurantor company becomes insolvent and goes into receivership. Does the guarantee fall away and become void?
What's the legal position as regards a guarantee if the gurantor company becomes insolvent and goes into receivership. Does the guarantee fall away and become void?
I think the question mf1 answered is different from the one Harvey76 asked.
If the guarantor ceases to exist, there cannot be a guarantee from that point in time. My read is that during the period of receivership, the guarantee stands, and if there is a default on the loan during that time then the lending institution becomes one of the unsecured creditors.