A guaranty where the guarantor’s liability is triggered by a bankruptcy filing by the borrower, a failure to obtain dismissal by the borrower of an involuntary bankruptcy petition filed against it, or other conditions specified in the guaranty. Probably far more effective to prevent a bankruptcy filing than the independent director, nonconsolidation opinion and other trappings of bankruptcy “remoteness” developed by the credit rating agencies.
See also Exploding Guaranty, Special (or Single) Purpose Bankruptcy Remote Entity.