- 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