SACRAMENTO, Calif., July 22, 2013 /PRNewswire/ -- Hackard Law attorneys regularly represent and defend California borrowers and guarantors in lender-initiated lawsuits. This litigation often involves the defense of prejudgment attachment proceedings that are ancillary to guarantee and judicial foreclosure actions. We begin the process of representation by a preliminary review of our prospective client's case and possible defenses to any lender action. A part of this review is securing an understanding of the terms of the loan agreement, promissory note, deed of trust and commercial guaranty that are typically included in commercial real estate loan documentation. We are regularly asked to review cases rife with the elements of lender-initiated sham guarantees.
The sham guaranty defense in commercial real estate loan litigation is based upon the principle that a borrower cannot also be the guarantor of his own debt. The essence of the defense is that the documents have been structured so that the guarantor has become the de facto borrower - in California a borrower entitled to the unwaivable anti-deficiency protections afforded by statutory and case law.
California law has been trending toward a more expansive protection of de facto borrowers even if they are nominally designated as guarantors in lender documents. These protections are intensively fact-based. Facts that must be addressed in any guarantor defense include whether the borrower functioned as a genuine entity as distinguished from a mere shell. This can easily arise when a borrower is an inter-vivos or living trust and the guarantor is the settlor, trustee and beneficiary of the trust. There are numerous additional inquiries that must be made to gain a full understanding of whether the lender purposely structured the loan transaction to preclude the guarantor from the protections of California's anti-deficiency laws.About Hackard Law, a Professional Law Corporation Hackard Law, a Professional Law Corporation, focuses on transactional and litigation matters. Michael A. Hackard is the principal attorney of Hackard Law - a Northern California law firm representing families with extensive business interests as well as clients impoverished by others' wrongdoing. For information about Michael A. Hackard, please visit: http://www.avvo.com/attorneys/95655-ca-michael-hackard-226264.html http://www.guarantorsdefenselaw.com http://www.hackardlaw.com CONTACT Hackard Law 10630 Mather Blvd. Mather, Sacramento County, CA 95655 Phone: 916-313-3030 SOURCE Hackard Law