Delaware Business Litigation Report

Court Of Chancery Explains Limits To Guaranty

Roseton OL LLC v. Dynegy Holdings Inc., C.A. 6689-VCP (July 29, 2011)

This decision explains the limits on a parent's guaranty of a subsidiary's performance in the context of what the parent can do with its assets and its ability to later honor the guaranty.  It is an illustration of the need to understand the client's business and for careful drafting of such agreements.

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