Guarantors of a corporate entity entering bankruptcy may face demands for payment from creditors but should take advantage of extending the automatic stay provisions of such demands to their own operations. In an article for the SMU Law Review, “The Guarantor’s Lifebuoy in the Bankruptcy Ocean,” the firm’s Jason Dennis and Carter Plotkin take an in-depth look at the case law and procedural guidelines for properly pursuing a stay:

By understanding the nuances of applying the automatic stay to indemnified guarantors, practitioners add a powerful tool to their arsenal against to defend against creditor claims.

Indeed, the failure to invoke the automatic stay to shield a corporate officer or guarantor effectively nullifies that individual’s indemnification rights.

Read the complete article here.