Security & Collateral · glossary
The reason a company needs before it helps another company, because its directors owe their duty to it (section 172 of the Companies Act 2006). Tooling gets none of the loan, so its board minuted how guaranteeing its parent helps Tooling. Its shareholder approved the guarantee in writing. Definition: Guarantor · Chapter 7 · see Upstream guarantee
Explained in Chapter 7, The Guarantor, the Group and the Negative Pledge, of Security & Collateral.
Also explained in Finance Deals & Syndicated Lending.
Tooling's directors owe their duty to Tooling, not to its parent or the group (section 172 of the Companies Act 2006). Yet Tooling receives none of the £12,000,000 loan. A subsidiary that guarantees its parent's debt gives an upstream guarantee, and the reason it helps the subsidiary is called corporate benefit.Read Chapter 7, The Guarantor, the Group and the Negative Pledge →
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Marlow Tooling Limited, incorporated in England and Wales with registered number 07455120, a wholly-owned subsidiary of the Company and the guarantor under the Facility Agreement;Read the definition in the document →
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