KMK Establishes Important Precedent on Enforceability of Pre-Bankruptcy Guaranties for Post-Bankruptcy Debt

Kohner, Mann & Kailas, S.C., recently secured a favorable result for our client in a matter that established important precedent for the enforceability of a guaranty, executed prior to bankruptcy, with respect to debts that arose after the bankruptcy was concluded. The case addressed a personal guaranty executed by the owner of a business. The owner declared a personal bankruptcy, but the business remained solvent. Years later, the business ceased operation while owing significant debts to a supplier. KMK represented the supplier in pursuing the debt, and successfully argued to the United States District Court for the Eastern District of Wisconsin that a guaranty, executed prior to bankruptcy, does not discharge the guarantor’s obligations concerning debt incurred post-bankruptcy. While KMK is very pleased with the specific result it obtained for our client, the decision also establishes new law that should help creditors pursue recovery under personal guaranties. Congratulations to KMK Attorneys Samuel C. Wisotzkey and Eric von Helms for achieving this important result! Read more here.