The Guarantee That Stays
The personal guarantee that does not transfer with the company, and from which the guarantor cannot exit unilaterally
The thesis
The controlling shareholder sells the company and remains liable for its debt. A surety (fiador) may release itself unilaterally; a guarantor under an aval has no such right, and Brazilian banks lend through bank credit notes (CCB), which carry an aval
What the study establishes
1
On a transaction of 156 million, the remaining exposure equals 29% of what the seller took home
2
The company's judicial reorganisation does not stay enforcement against the guarantor
3
Contractual indemnification gives a right of recourse, and it is worth least precisely when it is called upon
Contents
- What remains after the sale
- Aval and surety
- Why the bank does not release
- The risk quantified
- The five exits
- The sequencing
- When to refuse
- The gaps
- The mandate