Appeal Bond, Appellant Bond

Also referred to as a Supersedeas bond. In a case where damages, legal costs and/or legal fees have been awarded against an appellant party, it may be required to post a financial bond, either of its own funds or from an insurer, to assure the appellee that these awards are protected in the event the appellant loses the appeal. In essence, it is intended to protect against a losing party trying to use the appeals system to try to delay paying the award, during which time it might move assets out of the jurisdiction or go bankrupt. In some jurisdictions the appellant may be required to required to post the full amount of the judgment plus interest. The most often cited case is Pennzoil v. Texaco, where Pennzoil had won a $10.5 billion verdict against Texaco and Texas law required Texaco to post the entire amount plus interest, which forced Texaco to seek bankruptcy protection.  In US Federal Law Federal Rule of Civil Procedure 62 controls Appeal Bonds – and allows the district court has discretion to set a bond lower than the entire damages amount or to not require one at all, provided the defendant shows “good cause.”  By contrast, in many US state courts the appellate bond is non-discretionary.

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