COUNSELOR’S CORNER On July 18, 2025, the Nebraska Supreme Court issued a decision enforcing the plain language of two personal guaranties of bank loans. The decision rejected the effort of the guarantors to impose obligations on the lending bank beyond those contained in the loan documents. Baird Holm litigation partner Lindsay Lundholm led the successful representation of the bank in the lawsuit and on appeal. Henderson State Bank had advanced $1.5 million to an agribusiness through a business operating line of credit secured by the personal Nebraska Supreme Court Rejects Effort to Undermine the Enforceability of Personal Guaranties Henderson State Company v. Garrelts, 319 Neb. 485 (2025) Lindsay K. Lundholm, Partner Baird Holm LLP guarantors of three business owners and the managing owner’s spouse. The agribusiness and several other businesses owned by the managing owner ultimately failed. The managing member died suddenly and without any remaining assets. The bank turned to the two surviving business owner guarantors for repayment pursuant to each of their personal guaranties, but the guarantors refused to pay the debt, which led to the lawsuit for breach of the personal guaranties. In an effort to avoid repayment of the $1.5 million and accruing interest, the guarantors brought counterclaims for fraudulent concealment, fraudulent misrepresentation, civil conspiracy and breach of the implied covenant of good faith and fair dealing. The guarantors argued the bank should have disclosed information related to the financial affairs of the managing member and his business, and attempted to utilize unrelated bank records to argue the bank did not follow customary banking procedures in extending the line of credit or 20 NEBRASKA BANKER
RkJQdWJsaXNoZXIy ODQxMjUw