Indemnification for debt
if a member of an LLC plans to leave the LLC and there is a business loan that has been personally guranteed by all members, can an indemnification agreement be written to protect the leaving member from responsibility for that debt if all other members agree? Will the lending instution recognize this agreement?
Re: Indemnification for debt
I am not aware of any statutory obligation which would compel the lending institution to honor such a restructuring agreement. You should have an attorney review the terms of your finanacing agreement with the institution to see if that documents or creates any such obligation. If I were representing the departing member I would seek a hold-harmless and reimbursement clasue by the other individual members. Steve
Steven Martinek
Steven Martinek Lawyer Ltd.
700 Broadway Suite 102
Lorain, OH 44052