Reply to Oberlin College ordered to post $36 million bond to delay Gibson’s Bakery collection of Judgment

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Reply to "Oberlin College ordered to post $36 million bond to delay Gibson’s Bakery collection of Judgment"

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[quote=Anonymous]I don't think this mean what you think it means.

This is an appeal bond to keep the Bakery from being able to pursue Oberlin's assets while the appeal in pending, and it is utterly routine.  An appeal could potentially take years, and Oberlin doesn't want to let the Bakery take the money now and then have to fight to get it back if the judgments is overturned (because what are the odds this Bakery will still have $36 million in cash lying around in a few years?).  But the Bakery also doesn't want to take the risk that Oberlin will deplete all of its assets in those three years.  Granted, an institution like Oberlin is unlikely to do that, but in your more routine civil case between individuals, lots of people would rather get rid of their money the way they want (making themselves judgment-proof) than hand it over to someone they've been fighting with.

So instead of paying now, Oberlin contacts a bond company.   They pay the bond company a certain amount (probably 10% or less), and the bond company files an agreement with the court that when/if the judgment needs to be paid after the appear is done, they will pay it if Oberlin doesn't.  The Bakery doesn't get the money now, but it knows the money is secure if they win on appeal, so it's better than nothing for them.  If Oberlin wins, or if it loses but Oberlin pays the judgment, the bond company keeps the amount Oberlin puts up and everyone goes home.  If Oberlin loses on appeal and fails to pay the judgment, the bond company pays it and then chases Oberlin for the recovery.  [/quote]

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