Many real estate developers have signed so-called "bad boy" clauses personally guaranteeing the re-payment of all or part of a mortgage, made to a single asset entity as the borrower, if that entity files bankruptcy (or, even under some clauses, is placed in an involuntary bankruptcy). In Bank of America, N.A., et. al. v. Lightstone Holdings, LLC, et. al., Index No. 601853/09, the Supreme Court of the State of New York, New York County, recently enforced one such clause dealing with a voluntary bankruptcy of the mortgagor.
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