Somehow, that letter of comfort morphed into what the banks now argue to be an iron-clad guarantee under English law. ADADWhen India’s economy was booming, and firms were greedy to use leverage to grow, many of their controlling shareholders liberally gave out personal guarantees to lenders. The Ruia family recently lost its crown jewel — a 10 million-tons-a-year integrated steel plant in western India — to ArcelorMittal. Even here, the former asset owners had backed their borrowings with personal guarantees, and State Bank of India, the main lender, had even made an attempt to enforce them. But from Dec. 1, personal guarantees on corporate loans will be adjudicated under Indian bankruptcy law.

Source: Washington Post December 18, 2019 03:45 UTC