Guaranty and Suretyship Law - Whether an Individual May Avoid Obligations Under a Personal Guaranty Contract When a Company Converts to a Different Organizational Form

A recent case from the Fourteenth Court of Appeals of Texas took another look at the qualifications for personally guaranteeing the debts of a company and the repercussions of doing so for individuals.4 The court in Wasserberg held that the individuals were personally liable for the debts owed by the corporation because they had executed a valid guaranty agreement.  Although the defendants cited other cases where the personal guaranties were insufficient, the court distinguished between the case at hand, and the cases cited; finding that the defendants’ arguments were insufficient.

Read the case note in Related Content, below.  Read the full case HERE.