Legal Question in Business Law in New York

Lease Issues

My family has owned a business for almost 20 years. They are trying to close up shop for good. The company itself was established as an S-Corp. Both my parents are officers and my uncle. They can easily pay off all of their outstanding debts EXCEPT the equipment leases. My mother pulled the lease agreements and sure enough she signed the personal guarantee. Are my parents going to be held personally liable for remainder of the lease? Is their home and personal accounts at risk?


Asked on 6/17/08, 10:49 pm

1 Answer from Attorneys
Michael Markowitz Michael A. Markowitz, PC

Re: Lease Issues

I cannot give a proper answer without reading the guarantee. However, generally an individual that signs a personal guarantee under a lease agreement is responsible - together with the corporation - for payment to the leasing company. Failure to make payment would allow the leasing company to commence an action against both the corporation and the individual. If a judgment is entered against the individual, the leasing company may garnish the individual's assets such as bank accounts, stock accounts, and the judgment will place a lien against the house.

Mike.

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Answered on 6/18/08, 8:42 am


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