Any lenders - question? What does the bank lawyer review?
Reviewing my financial statements (I’m the LP), my company is co borrowing with another of the GPs companies.  It’s a lot of money.  

Our LP agreement doesn’t modify any of the standard fiduciary duty provisions.  

I’m confused why a bank would allow this? 

Isn’t this one of the things the bank lawyer would review?  Why would they allow my company to coborrow?
[{"id": "gxoik6b", "text": "I'm guessing the GP is financially strong and provides recourse regardless of actual borrowing entity and/or project has low leverage. RE financing isn't about eliminating risk, it's about identifying, understanding, and mitigating risk.", "replies": [{"id": "gxoiz01", "text": "You\u2019re correct in all your assessments.  Theirs just no benefit at all to my LP to coborrowing with his other entity. \n\nThey have upper 7 figures borrowed on line, I have none.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gxqo7yq", "text": "In general yes. They reviewed the org chart. It\u2019s not a fatal risk IMO", "replies": [{"id": "gxrbxba", "text": "So from the bank's perspective, wouldn't they want to have my Company's permission to co-borrow?  I'm sure the GP gave the permission, but their is no waiver of Duty of Loyalty in the LP agreement.  Wouldn't the bank and/or the bank's lawyer review the LP agreement or get consent from the limited partners to do the loan?    \n\n\nIf the co-borrower simply choses not to pay, if not fatal, it would hurt my Company really, really badly.  I'm confused why the bank would allow this.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gxre4mo", "text": "Bank lawyers provide legal expertise. They do not have the authority or experience to make loan decisions. They provide comments/concerns to the underwriter after reviewing LP agreements, and then it\u2019s up to the underwriter to choose how to handle their comments/concerns. The person underwriting your loan is either excellent at their job, or kind of awful. Your loan documents will include sufficient standard legal provisions the bank is comfortable with if the underwriter is excellent.", "replies": [], "depth": 1}, {"id": "gxu4g5k", "text": "Wait a second, I am trying to understand, you are a limited partner in Company A. The General Partner is also a GP in Company B. Both Company A and Company B borrow from lender.   \n\nYour concern is that if Company B defaults then A is on the hook?  Yes, you are correct. But correct me if I am wrong, the GP has the authority to encumber both Companies, correct? If that is so, and Company A has to pay by itself, then your cause of action is against the GP not the lender. Why would the lender be on the lookout for your interests?  The lender is trying to safeguard its interests.", "replies": [{"id": "gxumebx", "text": "That's exactly right.  \n\nI guess it's a bad assumption that the bank and/or the bank's law firm would review my LP documents to make sure he has the authority to do this.  Our LP documents do not modify the Fiduciary Duty of Loyalty, which is statutory in this state (PA).  \n\n\nIf the loan goes bad I would expect the company to sue to overturn the loan, and say it was never a legitimate loan.", "replies": [{"id": "gxusrjm", "text": "&gt; Fiduciary Duty of Loyalty\n\nJust to make sure you understand, you will be suing the GP as a limited partner investor, right? The loan is legit. The whole reason of having a GP is for the GP to enter into contracts and manage the company. What could make the loan not a legitimate debt in your eyes?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gyngq94", "text": "Seriously.... I am concerned for you a bit.  \n\nDisclaimer:  I\u2019m not an attorney. Do not rely on this commentary as advice. I am not licensed or trained to make legal structuring recommendations. \n\nThat said.  If I was in a position of buying real estate, I would always buy the property through a SPE (single-purpose entity or special purpose entity). Said newly formed entity\u2019s only reason for existence is to own the aforementioned real estate. That SPE (terminology here will be dependent upon LLC or partnership, etc. but language used loosely for ease) is then comprised of two (or more) members. For example you and the partner. Then, the SPE is the one who is the borrower. There is no co-borrower, which would really be typical under a Tenant In Common ownership structure. But the SPE is the borrower, and you are part owner of the SPE. \n\nUnder this structure, the lender could look to underwrite you as additional credit support in a downside scenario, but it doesn\u2019t obligate funding, but could you hypothetically make contributions to fund any shortfalls of cash flow were hit. Etc. \n\nSo, two elements. One on structure. One on why a lender wants intel on all LPs.  \n\nDon\u2019t personally be a co-borrower.", "replies": [], "depth": 1}]