Habitation Apartments Ltd. borrowed \$5,000,000 from its mortgage loan with the bank. The bank agreed to the Good Times Bank and secured the loan by way of extend the loan for a further three-year term but at a a three-year mortgage on its apartment building. The higher interest rate. Simple, who was still a shareholder bank demanded additional security for the loan, and of the corporation, was unaware of the new refinancing Simple, the president of the corporation, personally arrangement the corporation had made with the bank. guaranteed repayment of the loan. A year later, as a result of tenant problems and Several years later, as a result of a dispute between a high vacancy rate, the corporation was unable to shareholders, Simple was voted out of office as presi- meet its mortgage payments, and the mortgage went dent along with most of the Board of Directors, and a into default. When the corporation failed to pay the new president and Board of Directors were selected by mortgage, the bank turned to Simple and demanded the shareholders. During the months that followed, the payment under the guarantee. new president and Board of Directors reorganized the Discuss the rights of the parties in this case and corporation's operations. As a part of the reorganiza- explain the possible outcome if the bank should take tion, it was necessary for the corporation to rearrange legal action against the corporation and the guarantor