Supersedeas Bond

A Supersedeas Bond, often referred to as an Appeal Bond, is a judicial bond used in the appeals process within the court system. It acts as a financial guarantee, ensuring that the party appealing a court decision (the appellant) will pay the judgment amount, plus any additional costs, if the appeal is unsuccessful. This bond is particularly relevant in cases where the appeal involves a monetary judgment.

Supersedeas Bonds are necessary for individuals or entities who wish to appeal a court decision involving financial compensation. When a party loses a case and is ordered to pay a certain amount, but opts to appeal the decision, this bond ensures that the winning party (the appellee) will receive their due amount if the appeal doesn't turn out in favor of the appellant. Without this bond, the appeal might not be allowed to proceed, as it serves as a safeguard for the appellee's financial interests during the appeal process.

Obtaining a Supersedeas Bond involves a few key steps:

1. Determine the required bond amount: The court will specify the bond amount, typically equating to the original judgment plus any anticipated interest and court costs during the appeal.
2. Complete the application process: Fill out our Court Bond Application form, along with the Personal Financial Statement and Credit Release Form.
3. Undergo financial review: We will assess your financial stability, including credit checks and asset evaluation, to determine the risk involved in issuing the surety bond.
4. Pay the bond premium and sign the indemnity agreement: Once approved, you'll need to pay a premium, which is a percentage of the bond amount. This rate varies based on your financial standing and the bond amount.
5. File the bond with the court: After obtaining the bond, file it with the court to formalize its validity, enabling the appeal process to continue.

The cost of a Supersedeas Bond is not a flat rate but a percentage of the bond amount, influenced by several factors:

• Your credit score
• Your financial history
• Your financial assets

This percentage may range between 1% and 10% of the bond amount. The better your credit score and financial background, the lower the percentage will be. Keep in mind that the bond amount plays a pivotal role in determining the surety bond’s premium. That amount varies from state to state and depends heavily on the judgment owed.

We once had a client from Alabama, where Supersedeas Bond amounts can be set as high as 150% of the amount of the judgment. Our client was apprehensive, as his bond’s amount was quite high and, consequently, so was the collateral he had to post. Confident of the merits of his appeal and having a healthy financial background that secured him a lower premium, he moved forward with the process. The rest was up to the courts.

The functioning of a Supersedeas Bond can be outlined as follows:

• Financial Guarantee: The bond guarantees payment of the judgment amount, including costs and interest, if the appeal fails.
• Court Requirements: The court mandates the bond as a condition to proceed with the appeal, setting the bond amount.
• Appellant's Obligation: By posting the bond, the appellant commits to fulfilling the financial obligation if the appeal is unsuccessful.
• Surety’s Role: The surety company issues the bond and, in case of the appellant's default, pays the required amount to the court. The appellant is then responsible for reimbursing the surety.
• Appeal Outcome Dependency: If the appeal is successful, the bond is dissolved. If the appeal fails, the bond ensures the payment to the appellee, maintaining the integrity of the judicial process.