- 7 - also on the basis of the guaranty. The bank made the loan evidenced by the note for substantially the same reasons. The net worth of the guarantors was not a sufficient condition for the bank to deviate from its loan policy and make the loans. To deviate from its loan policy and make the loans, it was also necessary that it appear to the bank that the enterprise of the corporation was going to be successful. At the time the loans were made, the bank believed that the corporation had the potential to make repayment. The bank normally asks principals to guaranty corporate debt. For repayment of the loans, the bank would look, first, to the corporation, and, second, to the guarantors. If the corporation defaulted on the loans, the bank would immediately attempt to establish an interest in the inventory and other nonreal property assets of the corporation. It would then pursue its rights under the mortgage, and, finally, it would look to the guarantors. The bank (located in Michigan) does not normally make loans to Florida corporations or loans secured by Florida real estate. The fact that petitioner’s father was chief financial officer for a company that was both a large employer in the bank’s home area and a large customer played a role in the bank’s decision to make the loans.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011