A supersedeas bond, which is often referred to as an appeal bond, is a kind of surety bond that is required in certain court cases. When an individual or entity is appealing a judgment to a higher court, the bond ensures that the appellant will not evade financial responsibility for the initial court decision, if the appeal fails.
Surety bonds work like a contractual agreement between three parties. The principal is the entity that needs to post the bond, the appellant. The obligee in this case is the respective court. The surety is the bond provider that backs up the principal. The appeal bond guarantees payment if the principal/plaintiff should lose the appeal.
Appellants need to post a minimum of 100% collateral in the bond amount set by court order. Other costs and interest can increase this amount to comply with the courts requirements. The purpose of requiring a full collateral is to discourage abuse of the appeals court system. If litigants just want to extend a judgment or avoid covering financial costs, the high price of making an appeal would persuade them against such a course of action. The collateral is also used to reimburse the court, without financial loss for the surety backing the plaintiff.
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