Lord Lucasasked Her Majesty's Government:
Whether they consider it reasonable that, where a limited company remains solvent only by virtue of guarantees given by third parties to its bankers, those bankers should (in the event of the company then going into receivership) have a claim on the assets of the company to satisfy their debt without first deducting from their debt the amount which they could receive by claiming against the guarantors to the limit of the guarantees.
§ Lord Simon of HighburyThe terms of any contract between a bank and a company which borrows from it and any guarantee entered into by a third party to guarantee that lending are entirely a matter for the respective parties to agree before entering into them. In the event of a default by the borrower, the terms of the contract to lend and guarantee to support that borrowing will determine the rights and obligations of the parties involved.