Mumbai: Lenders to Kingfisher Airlines have stepped in to invoke the personal guarantee of Vijay Mallya as well as UB Holdings' corporate guarantee on borrowings by the grounded airline. State Bank of India, on behalf of the consortium of lenders, recently sent letters to convey their decision on the invocation of guarantees.
What the banks do next and the legal proceedings that follow could emerge as a benchmark case in Corporate India. Few high-profile promoters in the country have had personal guarantees invoked by banks.
If a guarantor fails to pay up after the invocation and within the time given in successive notices, creditors consider this as an act of insolvency.
06/04/13 Times of India
