personal guarantee in an LLC filing BK
When our business was set up with supplier a personal guarantee was signed by one of the previous owners. During the course of the company, we stopped using said supplier. After several years said supplier contacted us to start doing business with them again. No new personal guarantee was signed. In addition the original signer of this personal guarantee is no longer an owner. In addition a new contract was signed with NO personal guarantee stating that all previous agreements were null and void. Is this past owner still liable for the personal guarantee, as the business is considering BK.? Appreciate any answers. Thank you
1 Answer from Attorneys
Re: personal guarantee in an LLC filing BK
Given the facts as you present them, it appears that your company entered into what the law calls a Novation, which would operate to extinguish the old contract. The old owner may not have been a party to the new contract, but it may be implied that he is an intended beneficiary of the new contract and therefore not liable under the old contract.
Of course this is just a statement of opinion based on the facts given. You really need to have an attorney thoroughly review both agreements to give you accurate advise.