What is bad boy carve-outs?
Provisions in a non-recourse loan that create personal liability for the sponsor or guarantor upon specified misconduct: fraud, misrepresentation, misappropriation of rents or deposits, waste, unauthorized transfers or debt, failure to insure, environmental violations, or improper bankruptcy actions.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.