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The CIT Group/Equipment Financing, Inc. v. Shapiro, 2013 WL 1285269 (U.S. Dist. Ct. S.D.N.Y. March 29, 2013)

After a lessee's interests under a lease had been assigned to another lessee that subsequently stopped making payments and filed for bankruptcy, the lessor sued the original lessee and the personal guarantors on the original transaction. The defendants' arguments that they were not liable to the lessor because the lessor had failed to provide them with notice of the bankrupt lessee's default are rejected by the court on the ground that the assignment agreement between the original lessee and the bankrupt lessee stated that the original lease agreement remained in full force and effect. The terms of that original lease agreement, according to the court, provided that the lessor had no duty to provide notice before bringing suit. What the court and the defendants may not have considered is that the original lessee became a surety by remaining liable on the lease after the assignment ' i.e., it became a guarantor of the bankrupt lessee's obligations. Unless it waived defenses based upon suretyship, it should have been entitled to raise such defenses such as failure of the lessor to provide notice of the successor lessee's default.