On December 16, 2025, the U.S. District Court for the Southern District of New York granted summary judgment on liability in favor of lender Jasper Lake Ventures Two LLC, holding that its alleged refusal to engage with proposed sales of the collateral properties did not affect its rights under a guaranty.
In September 2023, the lender made a $6.4 million loan to two borrowers evidenced by a note and loan agreement and secured by two properties in Texas. On the same date, Logan A. Beitler, individually and as trustee of a family living trust, executed a guaranty in which the guarantors agreed to unconditionally guarantee payment and performance under the Loan Documents.
Just six months later, the borrowers started defaulting. First, in March 2024, they failed to make a mandatory principal prepayment; then they failed to list one of the two collateral properties for sale and to provide financial information, both as required by the loan agreement. Finally, they failed to repay the loan on the maturity date. Following notices of default, on May 14, 2024, the lender served a notice of foreclosure, and the lender later foreclosed on both collateral properties. In July 2024, the borrowers filed for bankruptcy.
On September 30, 2024, the lender sued on the guaranty. In March 2025, the guarantors filed an answer and counterclaims, contending that the lender “prevented Defendants from fulfilling their contractual obligations and thus facilitated their liability.” Specifically, the guarantors alleged that, in January 2025, the borrowers had received offers to purchase each of the two collateral properties, but the lender refused to stay its foreclosure action to enable one sale and failed to provide the definite amount of indebtedness as to the other property, leading to the termination of both proposed sales. The lender moved for summary judgment on the guaranty.
The court held that the lender’s alleged bad faith did not provide a defense to the lender’s motion. First, because the guaranty was absolute and unconditional, under New York law the guarantors had waived any affirmative defenses. In addition, the guaranty expressly waived any rights associated with (1) the loss or impairment of any collateral, and (2) the failure of the lender to exercise diligence or reasonable care in the sale or other handling of all or part of any collateral. While the guarantors argued that the lender had impaired the collateral because it (1) refused meaningfully to engage with the proposed sales and (2) failed to exercise diligence or reasonable care in the sale of the properties, the lender “was under no obligation to do so.” As a result, the guarantors “cannot establish that [the lender] acted in bad faith in failing to facilitate the proposed sales.” The defense was also barred, the court held, by the guaranty provision that “Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectability or value of any of the collateral,” which was consistent with the common law rule in New York for unconditional guaranties.
In addition to the waivers, the court held that the bad faith defense failed on its own merits. The first undisputed defaults occurred in March 2024, and the loan was accelerated in May 2024. The lender’s conduct in connection with the proposed sales took place in January 2025, and the court therefore held it had no bearing on the guarantors’ liability for defaults in 2024.
For the same reasons, the court also rejected the guarantors’ counterclaims, which were based on the same allegations of bad faith. Separately, the court held that the lender’s conduct in connection with the proposed sales could not constitute a claim for breach of the covenant of good faith and fair dealing. Because the guarantors agreed that the lender was not required to mitigate damages, and that their liability would not be diminished by any action taken or omitted with respect to the loan documents or the collateral, the lender’s decision to foreclose was “in no way inconsistent with the spirit of the agreement.” To the contrary, the court held, the guarantors’ reading of the documents was inconsistent with the express terms of the guaranty.
The case is Jasper Lake Ventures Two LLC v. Beitler, No. 24-cv-7386 (S.D.N.Y. Dec. 16, 2025). A copy of the decision may be found here.
