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Acquiring Bank & Enforced Signed Guaranty

Question: 
If a bank acquires another bank, can the acquiring bank enforce a signed guaranty pledged by a customer to the acquired bank?
Answer: 

Yes it can, as the successor bank. The acquiring bank should discuss how to handle legal situations with counsel to make sure proper language describing the acquiring bank as "successor to" the acquired bank is used in legal documents such as collections actions, foreclosures, renewals of UCC filings, etc.

Planning for these situations is part of merger and acquisition project planning.

First published on 02/10/2014

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