Thank you for sharing!

Your article was successfully shared with the contacts you provided.
http://nycourts.law.com/CourtDocumentViewer.asp?view=Document&docID=46712 Justice Austin DEFENDANT CORPORATION’S president died in a 2001 airliner crash. His heirs personally guaranteed a 2002 promissory note executed by the corporation’s vice-president. On Jan. 31, 2003, the corporation petitioned for bankruptcy liquidation, which was converted to Chapter 11 reorganization. Its sole assets are accounts receivable from firms located in the Dominican Republic, beyond the court’s jurisdiction. Plaintiff bank moved to sever its action against the corporation on the promissory note so that it could proceed against the guarantors of the corporate debt. The court granted severance. It found that due to the absolute, unconditional language of the heirs’ personal guarantees, the corporation was not an indispensable party to litigation. It also found that a stay of prosecution pending completion of the corporation’s bankruptcy would prejudice plaintiff bank and that to deny severance would effectively grant the heirs a stay of action that they could not obtain through the Bankruptcy Court.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.