Enforcing and defending commercial guaranties
A personal guaranty can place an owner's assets at stake when a business fails to pay. For the creditor, it may provide a separate source of recovery. The central questions are what the guarantor promised, which events trigger payment, what limits or defenses apply, and how much is actually owed.
MJB evaluates guaranty claims alongside the underlying loan, lease or financing agreement. We review the signed documents, amendments, notices, payment history and collateral recoveries to assess litigation, a negotiated workout or settlement. Proposed representations are subject to conflict review, including the firm's existing lender relationships.
Personal guaranty disputes we handle
The word "guaranty" does not resolve the scope of a person's liability. Disputes often turn on the language of the undertaking and what happened after it was signed.
Business loan and credit-line guaranties
Claims arising from unpaid commercial loans, revolving lines of credit and other business financing. We evaluate the obligations covered, the default and demand requirements, and the documentation supporting the creditor's claim.
Limited, unlimited and continuing guaranties
Disputes over dollar caps, expiration provisions, future advances, renewals and the debts included within a continuing guaranty. We examine whether the demand falls within the undertaking and how the documents address interest, fees and collection expenses.
Commercial lease and equipment-finance guaranties
Personal and corporate guaranties supporting office, retail, warehouse and equipment obligations. The review addresses rent or payment defaults, termination, amendments, surrender of property and the relationship between the guaranty and the underlying agreement.
Modifications, releases and disputed defenses
Questions involving loan or lease changes, extensions, changes in ownership, releases, consent provisions and waivers. We analyze whether the events relied on affect liability under the actual agreement and applicable law.
Collateral recoveries and the amount owed
Disputes over payment credits, collateral-sale proceeds, settlement payments, interest and the remaining balance. We connect the claimed amount to the transaction records and examine how other recoveries affect the demand against the guarantor.
Distressed businesses and coordinated enforcement
Guaranty litigation involving a failed or insolvent business, receivership, bankruptcy or multiple responsible parties. We assess the guaranty claim alongside the other proceedings, available assets and opportunities for a negotiated resolution.
Work with Matthew Bialick
Matthew Bialick represents banks and financial institutions in commercial lending disputes, workouts and enforcement matters. His approach to a guaranty dispute starts with the agreements and financial record, then considers the available remedies, likely defenses, litigation expense and practical prospects for resolution.
For background on the relationship between a company's debt and an owner's separate obligations, read our guide to business debt and personal guarantees.
Minnesota local counsel for out-of-state lenders and law firms
An out-of-state lender, finance company, commercial landlord or law firm may need Minnesota counsel when a guarantor, relevant assets or a lawsuit is located here. MJB can handle the litigation directly or work alongside existing counsel, including a company's regular outside lawyers or in-house legal department.
We handle commercial litigation in Minnesota state district courts and the U.S. District Court for the District of Minnesota, where federal jurisdiction is available. In a local-counsel engagement, we agree on responsibility for pleadings, motions, discovery, hearings and trial, subject to the court's rules and counsel's professional obligations.
Learn more about our Minnesota local counsel practice, including coordination with out-of-state lawyers and pro hac vice admission.
Personal guaranty litigation questions
Can you defend me if I am being sued on a personal guarantee?
MJB considers selected representations of business owners and other guarantors defending commercial guaranty claims. We first review conflicts, including existing lender relationships, and then assess the documents, allegations and response deadlines. Tell us whether you have received a demand letter or have already been served with a lawsuit.
Does the lender have to pursue the borrower or collateral first?
Not necessarily. The answer depends on the guaranty's terms and applicable law. Some guaranties permit a direct claim against the guarantor without first exhausting remedies against the borrower or collateral. Others contain conditions that must be satisfied. We review the actual agreement before advising on the available sequence of enforcement.
Can a signed personal guaranty be challenged?
A signed guaranty requires careful review, but the existence of a signature does not resolve every issue. Potential disputes include the scope of the obligation, formation and consideration, conditions to enforcement, modifications, releases, waivers and the amount claimed. Minnesota law generally requires a promise to answer for another's debt to satisfy a writing requirement. The facts and documents determine which issues matter.
Does closing the business or filing business bankruptcy eliminate my personal guarantee?
Not automatically. Closing a company does not by itself release a separate guaranty. A bankruptcy discharge of the borrower generally does not eliminate another party's liability for the same debt. The guarantor's own bankruptcy, any applicable court orders, and restrictions on collection require separate analysis.
Can an out-of-state lender or law firm retain MJB for a Minnesota guaranty lawsuit?
Yes. We can discuss direct representation or a Minnesota local-counsel engagement for a commercial guaranty dispute. We handle matters in Minnesota state district courts and, where federal jurisdiction is available, the U.S. District Court for the District of Minnesota. Identify the parties, the relevant agreements, any pending case and the role you need us to perform.
What should I provide for an initial discussion?
Start with the parties' names, the amount at issue, any Minnesota connection and any approaching deadline. Relevant records include the guaranty, underlying loan or lease, amendments, releases, payment history, demand letters, lawsuit papers and records of collateral sales or other recoveries. Please arrange with the firm before sending confidential documents.
Discuss a Minnesota guaranty dispute
Contact Matthew Bialick about enforcing or defending a commercial guaranty, evaluating a demand or coordinating Minnesota litigation with your existing attorneys. Identify the parties, the approximate amount in dispute and any response or hearing deadline.