Illinois Hops On Springing Guaranty Bandwagon

Law360, New York (February 6, 2013, 11:39 AM EST) -- Illinois continues a nationwide trend enforcing “bad boy carve-outs” in non-recourse mortgage loans. The Appellate Court of Illinois recently upheld a “springing guaranty” providing that an otherwise partial loan guaranty would become full recourse to the guarantors if the borrower opposed the lender’s exercise of certain of its default remedies.

In Bank of America NA v. Freed et al., 2012 IL App (1st) 110749 (2012), (Ill.App. 1 Dist.), LaSalle Bank NA[1] made a construction loan in the principal amount of $205,000,000 to Joseph Freed and Associates...
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