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    nal note and about another $50,000. The parties to the second note ultimately defaulted, and the plaintiff assignee, who held the note and mortgage, sued everyone, including the original signatories. The def
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    On February 28, 2007, the Indiana Court of Appeals decided a case about the personal liability of guarantors/accommodation parties in Keesling v. T. E. K. Partners, 2007 Ind. App. LEXIS 358. If you’re a lender that modifies deals, or enforces loans that have been reworked, Keesling is instructive.

    Background. In Keesling, an Indiana commercial foreclosure case, there were multiple parties to an installment note and mortgage related to the development of a residential neighborhood. Three entities and four individuals in their personal capacities signed the original note of $300,000. (There were no guaranties.) When the note came due, there was approximately $50,000 left to be paid. Some, but not all, of the original parties entered into a second note that took into consideration the balance remaining of the original note and about another $50,000. The parties to the second note ultimately defaulted, and the plaintiff assignee, who held the note and mortgage, sued everyone, including the original signatories. The def

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    r that modifies deals, or enforces loans that have been reworked, Keesling is instructive.

    Background. In Keesling, an Indiana commercial foreclosure case, there were multiple parties to an installment note and mortgage related to the development of a residential neighborhood. Three entities and four individuals in their personal capacities signed the original note of $300,000. (There were no guaranties.) When the note came due, there was approximately $50,000 left to be paid. Some, but not all, of the original parties entered into a second note that took into consideration the balance remaining of the original note and about another $50,000. The parties to the second note ultimately defaulted, and the plaintiff assignee, who held the note and mortgage, sued everyone, including the original signatories. The def

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    note and mortgage related to the development of a residential neighborhood. Three entities and four individuals in their personal capacities signed the original note of $300,000. (There were no guaranties.) When the note came due, there was approximately $50,000 left to be paid. Some, but not all, of the original parties entered into a second note that took into consideration the balance remaining of the original note and about another $50,000. The parties to the second note ultimately defaulted, and the plaintiff assignee, who held the note and mortgage, sued everyone, including the original signatories. The def
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    When the note came due, there was approximately $50,000 left to be paid. Some, but not all, of the original parties entered into a second note that took into consideration the balance remaining of the original note and about another $50,000. The parties to the second note ultimately defaulted, and the plaintiff assignee, who held the note and mortgage, sued everyone, including the original signatories. The def
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    nal note and about another $50,000. The parties to the second note ultimately defaulted, and the plaintiff assignee, who held the note and mortgage, sued everyone, including the original signatories. The defendants relevant to this article did not know about or consent to the execution of the second note. They contended that they merely were accommodation parties on the original note and that, because the second note constituted a material alteration of the original obligation, they should be discharged from further personal liability under either note. The Court agreed.

    Guarantor vs. accommodation party. The Indiana Court of Appeals labeled the individuals who signed the original note in their personal capacity as “accommodation parties” pursuant to the definition in Indiana’s UCC, Article 3.1: I.C. 26-1-3.1-419. An accommodation party, according to the Indiana UCC, is someone who signs an instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for t

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