4 ms·

I was asking on what grounds someone could expect a personal guarantee from individual founders, rather than a guarantee from the business that no longer exists

I was asking on what grounds someone could expect a personal guarantee from individual founders, rather than a guarantee from the business that no longer exists. (Unless the terms of the convertible note are particularly horrific.) (I'm not questioning that an investor via convertible note has the ability to call the note due from the company. The specific sentence quoted in my reply regarded the expectation of personal repayment after the company was driven into bankruptcy.)

deleted 7y ago
[deleted]
hogFeast 7y ago
Two reasons occur: personal guarantee on the note (I have no idea whether this occurs where this person lives...it isn't something I would ever do, no matter the circumstance) or fraudulent conveyance (i.e. the executives start stripping assets when the company goes into BK, afaik this is a civil action that can be brought against executives either by creditors themselves or trustees).