Is it prudent to obtain a corporate guarantee when granting credit to a wholly-owned subsidiary and you only have financial information on the parent or holding company?

According to James Schulwolf, an attorney with Shipman & Goodwin LLP in Hartford, Connecticut, it would be prudent to ask the parent company for a corporate guarantee.

Schulwolf, who serves as the chairman of the American Bar Association’s Business Law Section’s Commercial Finance Committee, says he would advise a lender to obtain a corporate guarantee from the parent or holding company if they didn’t have any financial information on the wholly-owned subsidiary.

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