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Apr. 14, 2015
'Sham guaranty' defense limited by recent decision
On April 2, the 1st District Court of Appeal clarified the "sham guaranty" defense, an important arrow in the quiver of many guarantors facing liability for a corporate borrower's default on a loan. By Gregory P. Barchie
On April 2, the 1st District Court of Appeal in CADC/RAD Venture 2011-1 LLC v. Bradley, 2015 DJDAR 3743, clarified the "sham guaranty" defense, an important arrow in the quiver of many guarantors facing liability for a corporate borrower's default on a loan.
Under Code of Civil Procedure Section 580d, "no deficiency judgment shall lie" following a nonjudicial foreclosure sale, leaving only the securi...
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