Sec. 3. (1) A post closing solvency covenant shall not be used, directly or indirectly, as a nonrecourse carveout or as the basis for any claim or action against a borrower or any guarantor or other surety on a nonrecourse loan. (2) A provision in the documents for a nonrecourse loan that does not comply with subsection (1) is invalid and unenforceable.
Mich. Comp. Laws § 445.1593
Post closing solvency covenant; prohibited use
Applied in 2 court decisions — leading case Borman, LLC v. 18718 Borman, LLC (2015)
Most recently applied in Borman, LLC v. 18718 Borman, LLC (February 2015)
2012, Act 67, Imd
Official source: Michigan Legislature. Reproduced from public-domain Michigan statutes; confirm against the official source for the current text. Not legal advice.