Benjamin Wanger Offers Comment Regarding Guaranty HoldersOn November 30, 2012 by Schnader in Labor and Employment
In the Law360 article “Pa. Loan Default Case Could Spell Chaos For Guaranty Holders,” Benjamin D. Wanger is quoted about the recent oral arguments heard by the Pennsylvania Supreme Court in Osprey Portfolio LLC v. George Izett. He suggests that the case could create a free-for-all for guaranty holders as some debtors attempt to escape liability for nonpayment while banks are forced to inspect every loan they have issued.
The appeal stems from a $50,000 loan guaranty signed under seal which custom golf club maker Izett Manufacturing Inc. defaulted on in 2005. While a Chester County trial court and the Pennsylvania Superior Court both ruled that the guaranty was an “instrument” subject to a 20-year statute of limitations under state law, Izett maintains that state law allows for differentiation between instruments and more general contracts, such as its loan guaranty, that are subject to a four-year statute of limitations.