Philadelphia partner Andrew Kassner, firm co-chair, and senior attorney Joseph Argentina co-authored “Personal Guaranty of Commercial Lease Held Discharged in Guarantor’s Bankruptcy” for the April 16, 2020, edition of The Legal Intelligencer.
With work patterns disrupted and an anticipated increase in bankruptcy filings caused by the impact of the COVID-19 pandemic, many practitioners are trying to understand this cycle, going back to the savings and loan crisis of the late 1980s. Among the issues that keep coming up in bankruptcy cases cycle after cycle is whether a personal guaranty of a commercial lease is discharged in the bankruptcy of the individual guarantor. Court decisions have split on this issue for years. The authors caution against assuming a guaranty will continue to be enforceable post-bankruptcy absent some affirmative undertaking by the guarantor.