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Will Exploding Guaranties Bomb?, Marshall E. Tracht

Articles & Chapters

Springing and exploding guaranties - insider guaranties that will become due ifand when a borrower files for bankruptcy - have become popular as "bankruptcy-proofing" devices, yet there is little case law or literature on their enforceability. This article reviews the limited existing law on these bankruptcy-contingent guaranties and examines some of the arguments against their enforceabiltiy that can be expected to be made in the future.