Cheryl Cusack and Jason Brasseur are married. In 2005, Ms. Cusack signed a “continuing” guarantee for the indebtedness of Mr. Brasseur’s company to the Royal Bank of Canada (“RBC”) for $150,000. The guarantee covered present and future liabilities of the company and were not tied to any specific loan between RBC and the company. Ms. Cusack received independent legal advice before signing the guarantee.
RBC also held a first ranking security interest in the company’s assets and a personal guarantee from Mr. Brasseur.
In 2006, RBC agreed to increase the company’s operating line of credit to $250,000. Ms. Cusack and Mr. Brasseur each gave fresh personal guarantees for $250,000 to RBC that covered the company’s present and future liabilities.
These guarantees were also continuing guarantees and were not tied to any specific loan between RBC and the company.