• You Don't Have to be a 'Bad Boy' to be Liable Under a 'Bad Boy' Guaranty
  • April 26, 2012 | Author: Chava Eva Klein
  • Law Firm: Ruskin Moscou Faltischek, P.C. - Uniondale Office
  • "Bad boy" guaranties in commercial real estate loans have been commonplace for many years. However, neither guarantors, nor lenders expect guarantors to incur liability unless a "bad boy" act is actually committed. Two recent cases, however, subjected guarantors to liability previously non-existent, and have thrown the entire CMBS (Commercial Mortgage Backed Securities) industry and other commercial loan markets into upheaval. But in direct response to industry outcry against these decisions, and while these cases remain on appeal, the Michigan Senate quickly passed the "Non-Recourse Mortgage Loan Act" (effective March 29, 2012), which offers relief from these misguided decisions.