Legal Question in Business Law in Washington

Continuing personal guarantee

I signed a continuing personal guarantee about 6 years ago. I sold my shares of the S-corp in 4/05. Now, I am being sued 7,000(8,000 has already been paid by bonding companies for a total of 15,000 + any additional attorney fees). The store manager and the sales rep ( for the company that is suing me) admit to knowing I was no longer part of the company. I did not notify them in writing. What are my chances of getting out of owing the money? Also, can the bonding companies that paid on this debt sue me?


Asked on 2/22/09, 12:21 am

1 Answer from Attorneys
Susan Beecher Susan L. Beecher, Atty at Law

Re: Continuing personal guarantee

On the facts you have presented here, you are probably liable for the amount being sued for. (You don't give any details about the underlying dispute, so I can't say whether there might be a defense there.) The problem is that even though you left the S Corp, the third party to whom the guarantee was made was not a party to that transaction.

You might have recourse against any other parties who also signed the personal guarantee, and you might have other recourse depending on the facts of the case. If you do not already have an attorney, I would urge you to consult with one.

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Answered on 2/22/09, 10:57 am


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