Brasseur operated a business (Sampson Management and Solutions) in need of financing. He arranged a line of

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Brasseur operated a business (Sampson Management and Solutions) in need of financing. He arranged a line of credit with the Royal Bank for $150,000. Both he and his wife (Cusack) signed guarantees in support of the loan. The amount was raised to $250,000 for which new guarantees were signed by both Braseur and his wife. Additional loans were arranged first for $500,000 and then $750,000. These new lines of credit were guaranteed by Brasseur, but not by his wife; nor did she consent to them. The Samson business failed in 2011 and the Royal Bank demanded payment from both Brasseur on the basis of his $750,000 and from his wife Cusack for her $250 000 guarantee. Explain what arguments she could raise in her defence. Would your answer change if the wording of the guarantee she signed allowed for further indebtedness and she had received independent legal advice?

Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...
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