Newsflash: US Lenders - Missing Parenthesis Could Cost You a Bundle

January 03, 2017

As the case of NNN Realty shows, years of litigation and legal costs could be avoided with proper use of punctuation marks. A lender made a secured real estate loan to several entities who owned the real estate as tenants in common. When one on the borrowing entities, owning 3.3% of the property, filed for bankruptcy, the lender accelerated the loan and demanded full repayment from one of the borrowers, NNN Realty. The lender argued that the guaranty was clearly triggered upon the property or any part thereof becoming the subject of a bankruptcy proceeding “of Borrower.”

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