Guarantor

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?

Harvey76 said:

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?

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Please tell me you are joking.

Why do you think the lender wanted a guarantor?

And no, the guarantee does not fall away and become void. The guarantee gets called in. The guarantor fulfils its obligations to the lender.

mf

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.

Oooooops!

Falls on sword- aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah.

mf