Covid placed severe stress on the aviation industry causing many lessees to default. This article considers whether security trustees acting on behalf of aircraft financing creditors need to enforce security in order to mitigate the creditors’ losses and maximise their claims.
31 MAR 2024Guarantees are essential features of commercial financing transactions. But the nature of the guarantor’s liability may vary significantly. Is the guarantor liable only when the underlying obligor has defaulted on its obligations (a “see to it” guarantee) – or as soon as the guarantee’s beneficiary makes a good faith demand (an “on demand” guarantee)? Shanghai v Reignwood [2021] EWCA 1147 (Court of Appeal) illustrates the importance of the distinction, and how it can turn on fine points of construction.
1 JAN 2022