litigation
GUARANTEES and SECURITY
Strategic advice on the enforcement, interpretation and challenge of guarantees and security in commercial lending and recovery matters.
WHEN SHOULD LEGAL ADVICE BE SOUGHT?
Legal advice should be sought where enforcement of a guarantee or security is contemplated, liability is disputed, documentation is being challenged or there is uncertainty as to the scope and enforceability of the obligations involved.
These matters often turn on the precise wording of facility agreements, guarantees, security documents and related correspondence, together with the factual background to the lending relationship.
KEY ISSUES with GUARANTEES and SECURITY
- Interpretation of guarantee obligations
- Scope of guarantor liability
- Validity and enforceability of guarantees
- Demands and notices
- Security documentation
- Enforcement against secured assets
- Defences to enforcement
- Release, variation and compromise
- Priority and competing security interests
- Corporate and personal guarantees
- Settlement strategy
- Related possession or recovery proceedings
How o'Regan little solicitors llp can help
Our solicitors advise lenders, financial institutions, investors, guarantors and other stakeholders on disputes arising from guarantees and security arrangements.
We assist with reviewing the relevant documentation, assessing enforceability, advising on demand and enforcement strategy, responding to challenges and progressing related recovery or court proceedings where necessary.
Our focus is on identifying the legal and commercial risks at an early stage and developing a strategy that reflects the value of the security, the available remedies and the client’s wider objectives.
Representative experience
Our solicitors' experience includes:
- Advising on enforcement of personal and corporate guarantees.
- Acting in disputes concerning the interpretation and scope of guarantee obligations.
- Advising lenders on enforcement of security following borrower default.
- Acting in proceedings involving challenges to guarantees and related documentation.
- Advising on competing security interests and priority issues, and carrying out security reviews.
- Acting in recovery proceedings involving secured property and other assets.
- Advising on settlement and restructuring options in contested enforcement matters.
- Managing litigation arising from complex lending and security arrangements.
frequently asked questions
What is a guarantee?
A guarantee is a contractual promise by one party to answer for the obligations of another, usually where the principal borrower or obligor fails to perform. The scope of liability depends on the wording of the guarantee and the surrounding documentation.
Can a guarantee be enforced immediately after default?
That depends on the terms of the guarantee, the underlying facility documents and any applicable demand or notice requirements.
Can a guarantor challenge enforcement?
Yes. Challenges may arise concerning the validity, interpretation, scope or enforceability of the guarantee, as well as the circumstances in which it was entered into or subsequently varied.
What is the difference between a guarantee and security?
A guarantee creates a contractual obligation against the guarantor, while security generally gives rights over specified assets. In many lending arrangements both may be available.
Can security be enforced at the same time as a guarantee?
Potentially, yes. The available remedies depend on the relevant documentation, the nature of the default and the strategic objectives of the secured creditor.
Can disputes over guarantees be settled?
Yes. Depending on the circumstances, negotiated settlement, restructuring or compromise may provide a commercially preferable alternative to contested litigation.
discuss GUARANTEES OR SECURITY
If you require advice on the enforcement, interpretation or challenge of guarantees or security, speak with O'Regan Little Solicitors LLP.