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Facilitator Guide

Guaranties

What’s covered

  • Upstream vs. downstream guaranties
  • Guarantor(s) liability
  • Collection guaranties
  • Payment guaranties 
  • Performance guaranties
  • Continuing guaranties
  • Limited guaranties
  • Bad boy guaranties
  • Guaranty Agreements
  • Subrogation
  • Setoff rights

Before the session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

https://www.hotshotlegal.com/discussions/guaranties/attendee

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

  • still frame from Guaranties

    Course

    Guaranties

    A discussion of guaranties, including the key provisions in a guaranty agreement and the different types of guaranties that can be given, such as payment vs. performance guaranties and down-stream vs. upstream guaranties.

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    Exercise

    PDF

During the session

Part 1: Knowledge Check
 
Ask attendees these questions to ensure they understand the topic:
 
  • If a borrower is a parent holding company, who will be the guarantors? What if the borrower is an operating subsidiary? 
  • What are some of the different types of guaranties? Do any of these guaranties frequently overlap? 
  • What type of obligations does a guarantor typically guaranty in a lending deal? 
  • What do setoff rights allow a lender to do? 
  • What are some of the ways that the lender makes sure the guaranty is iron-clad? 
 
Part 2: Group Exercise
 
Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.
 
Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.
 
Part 3: War Stories and Firm Specifics
 
Share your own experiences and guidance, including:
 
  • Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
  • General practice tips (dos and don’ts)
  • Firm-specific guidance and practices 

After the session

To continue their learning, attendees can check out related courses in Hotshot’s Commercial Lending topic.