Court & Litigation Bonds
Court & Litigation Bonds - A Court Bond is a guarantee required by Statute or Court Order for the benefit of another person, company, public, state or federal entity, otherwise known as the Obligee. They are filed in connection with litigation by a Principal as specified by the Court. The Principal can be the Appellant, Plaintiff, Defendant, or anyone who seeks Court intervention; the bond protects the Obligee from loss as a result of the ensuing litigation.
The Arthur B. Levine Company handles all types of Court bonds and is known for coming up with creative solutions in even the most complicated matters.
The most common Court bonds are:
- Appeal
- Supersedeas
- Temporary Restraining Order
- Preliminary Injunction
- Replevin
- Attachment
- Discharge Mechanic's Lien
- Discharge Attachment
- Security for Costs
- Removal
Once a Court Bond is filed, it cannot be released without mutual consent or court order. There is, consequently, no cancellation clause permitted in Court Bonds and no statutory provision for the release of a Surety. It is irrevocably binding until all parties agree to its termination or until the case has been settled with Court approval.
Underwriting and Collateral: Since Court Bonds offer financial protection to the Obligee, they are written very carefully. The Principal's ability to secure the bond is determined by the underwriter's evaluation of his/her financial status, reputation and overall experience. Attention is given to the Principal's liquid assets and stockholders equity, and often, collateral is required to obtain these bonds. Presently, Letters of Credit and much less frequently, wire transfers are accepted forms of collateral by the Sureties. Collateral is always held for the entire amount of the bond, except in the case of Appeal and Supersedes Bonds, where the collateral must include interest as well. Letter of Credit formats and the name of the issuing bank must be approved by the Surety prior to issuance.
