Can you guarantee that?

You've just acquired a new business, you're getting settled in, meeting the employees, reviewing the financials and then discover that things are not as they seem. While the seller gave warranties that all information provided was true and accurate, it clearly wasn't and this is now costing you dearly. You serve the seller with a warranty claim, only to discover that they have closed up shop, distributed the sale proceeds and wound up the business. Fortunately, you had insisted on including a guarantee in the sale agreement and so now you can be sure that the guarantor will make good on the deal. Can't you...?

Many business and share acquisitions include a guarantee, often given by a founder or significant stakeholder. Such arrangements are a useful mechanism to protect buyers in the event the seller intends to wind up after the sale. Similarly, parent company guarantees are commonly sought by sellers for protection when a newly-incorporated entity or special