Looking to Manage Litigation Costs? Take a Closer Look at Collateral Requirements of Supersedeas Bonds

December 30th, 2016

As large businesses in all sectors look for ways to control litigation costs, one area they might target for improvement is in procuring special surety bonds required of any firm appealing a verdict.


The bonds, known as supersedeas bonds, are required by courts to enable the appellant to delay payment of a judgment until the appeal is over. The bonds must cover the full cost of the pending judgment and any related court costs, so they can involve large sums of money. In addition, they generally have steep collateral requirements based on a percentage of the face amount of the bond, which can tie up the appellant’s capital for an extended time as the judicial process plays out.


The surety company’s key role. At the end of an unsuccessful appeal, the surety company can pay judgment and court costs if the appellant is unable to do so. However, the appellant then must indemnify the surety for these costs. Thus, in underwriting the bond, sureties make sure the “guarantor” of the bond (typically, the defendant) has the financial wherewithal to pay the judgment if it fails to win the appeal.


Qualifying for reduced collateral. In some instances, large companies with strong financials and ample liquidity may qualify for bonding with reduced collateral percentages or even no collateral at all. This can free up significant amounts of a firm’s capital.


Experience matters. Obtaining supersedeas bonds can involve a time-consuming and onerous process. Courts in most jurisdictions require surety carriers providing such bonds to be on the U.S. Treasury Department’s listing of approved sureties; however, not all sureties are so qualified.


That’s where working with an experienced firm, such as Unique Surety, can make a difference. We quickly review an applicant’s financial situation, assess the case’s needs, choose the right surety carrier, get a competitive price, and negotiate the most favorable collateral, if any, required for the surety to quickly approve the case.


That enables Unique Surety, which has the surety carrier’s power of attorney, to arrange for the company or its law firm to wire the premium so the surety can provide approval for Unique Surety to issue the supersedeas bond quickly – including by overnight delivery or courier service anywhere in the U.S. as necessary – and the court can receive it in a timely manner.


For expert and timely assistance in the procurement of supersedeas bonds, contact Unique Surety at www.supersedeas.com or www.suretybondsbyunique.com.