In the courts

Enforceability of a guarantee
A financier lent almost $2 million to a company to refinance debt and to finance a new development. When the company went into liquidation, the guarantor argued that his liability under the guarantee was extinguished when a second loan was advanced to a related company.

Voidable preference not found where another company's debt was paid
When a company in financial difficulty paid another company's debt, no voidable preference was found because the debt paid was not its own.

Guarantee not dependent on maintenance of security
A guarantor argued that failure by the lessor to disclose levels of leased stock to the guarantor rendered the guarantee ineffective.

If you want a guarantee, get a guarantee signed
A loan recorded in an "investment certificate" which stated that security included a personal guarantee was not a guarantee.

Enquiries and information

For more information on any of the cases, articles and features in Financial Services Quarterly, please email Rachel Gowing or call on 64 9 916 8825.