Mr. Christian Successfully Obtains Supreme Court of Alabama Affirmation of Summary Judgment in Favor of Regions Bank

Our Mr. Christian was successful in defeating the contention of several pro rata guarantors of a borrower’s indebtedness to Regions Bank that their pro rata guaranty agreements were ambiguous, or provided for a pro rata reduction of their liabilities when several other pro rata guarantors first made payment of their respective pro rata guaranty obligations. The first set of pro rata guarantors made a payment in full of their obligations under their pro rata guaranty agreements executed at the same time as the second set of pro rata guarantors, reducing the original $2.1 million of indebtedness from the borrower to $1.4 million. The second set of guarantors alleged that the pro rata guaranty agreement gave them a credit for the earlier guarantor payments, thereby reducing their liability to a percentage of $1.4 million as opposed to a percentage of $2.1 million. The Supreme Court of Alabama disagreed and affirmed a summary judgment in favor of Regions Bank, noting that the arguments from the pro rata guarantors did not make sense. McCollough v. Regions Bank, No. 1040665 (Ala. October 6, 2006). Reported in Commercial Lending Litigation News (December 21, 2006, p. 2).