Its all about the guaranty
by Travis Hendron and Paul F. Rubin
Insolvency professionals, both lawyers and financial advisers, are often facing an all-too-common issue when advising on real-estate-related situations in today’s market. The issue they face is that the property has more debt than it can support and/or more than it is worth and the entity they represent, the debtor, may be only one of the guarantors in the failed real estate venture. Every legal and financial adviser dealing with distressed real estate needs to put up a sign reminding themselves (and their clients) that “It’s all about the guaranty.” In almost all distressed real estate situations today, the banks are looking to the guaranty as a source of funds for repayment.