Cross-Guaranteed

Last Updated: Jun 6, 2019

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An agreement in which two or more entities guarantee each others liabilities. An example would be when the Parent Company guarantee's the Subsidiary's liability and the Subsidiary guarantees the Parent Company's liability. These types of guarantees are commonly known as upstream and downstream guarantees. A major concern when relying on cross-guarantees is the term "Consideration" which stipulates whether the guarantor has received consideration or value for extending its guarantee.