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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 23657
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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We owned a C Corp and it has gone out of business. The Corp

Customer Question

We owned a "C" Corp and it has gone out of business. The Corp and us are being sued for a line of credit. We signed as personal guarantors on the loan. The lawsuit states that the original note is lost, but they have a document with our signatures as guarantors. Question: Are we protected by the C Corp and do we have a case since they don't have the original note.
Submitted: 5 years ago.
Category: Business Law
Expert:  Law Pro replied 5 years ago.

They have a very hard time if they can't prove the original underlying contract.

 

I would not agree to anything without having an attorney review exactly what the "loan guarantee" document states.

 

If all things can be known from the "loan guarantee" document - then no - your still liable.

 

However, they may be lost without the original contract.

 

Customer: replied 5 years ago.

The document is hard to read, but appears to say what is on the original note (which we have). The guarantee states that "each of the undersigned jointly, and unconditionally guarantees payment...etc

 

Also, since it was transacted under a C corp, can the corp declare bankruptsy.

 

 

Expert:  Law Pro replied 5 years ago.

Does it state the amount of money, the terms of the loan, the interest rate, over what period repayment is to be made, how often payments are to be made, etc.?

 

If you guaranteed the loan - then it wouldn't matter if the corp would file a bankruptcy - you would also have to file personal to get out of the debt.

Customer: replied 5 years ago.

Once again, it is hard to read, but does state the loan amount, not the interest rate, not the term of the loan, not the payment dates

Expert:  Law Pro replied 5 years ago.

Then they are really stuck - that could be a once a year payment @ 1% of $100.00.

 

They cannot file suit upon something they don't have. It's incumbent upon them to come up with the contract - don't give them anything.

 

Retain yourself local counsel immediately - they should be able to dismiss the action or suit against you. As a condition precident - the plaintiff has to - must - attach a copy of the contract to the complaint or the complaint should be dismissed.

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