Non Contingent Debt Law
Corporate law
Corporate law (also "company" or "corporations" law) is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another. Corporate law is a part of a broader companies law (or law of business associations).
What is the meaning of the word non contingent?
: not contingent especially : not dependent on, associated with, or conditioned by something else noncontingent debts The offer to purchase the property was noncontingent. … the property's being marketed for sale noncontingent on any rezoning or entitlement actions. — Daniel J. Sernovitz First Known Use of noncontingent
What is contingent debt?
Contingent debt is an unusual kind of debt that is dependent on uncertain future developments. In legal terms, the word "contingent" means something that might or might not happen. A contingent debt is not a definitive liability because it is based on the outcome of an event, such as a court verdict.
What is the meaning of noncontingent?
non·con·tin·gent | \ˌnän-kən-ˈtin-jənt \. : not contingent especially : not dependent on, associated with, or conditioned by something else noncontingent debts The offer to purchase the property was noncontingent. … the property's being marketed for sale noncontingent on any rezoning or entitlement actions.
What are non-contingent liabilities?
Non-Contingent Liabilities means any liabilities of WFSL in relation to the Business as stated, accrued or provided for in the Accounts;
What is contingent debt?
Why is the payment of a debt not certain?
Is it possible to foretell a debt that might or might not occur?
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What does it mean non contingent?
: not contingent. especially : not dependent on, associated with, or conditioned by something else. noncontingent debts. The offer to purchase the property was noncontingent.
What is non contingent liabilities?
Liabilities that are not contingent liabilities but are estimated liabilities include the following: The electricity and natural gas consumed but the bill has not been received. An emergency repair that occurred but the bill has not been received.
Are contingencies a debt?
A contingent debt is an unusual kind of debt that is dependent on uncertain future developments. A contigent debt is not a definitive liability as it is based on the outcome of a future event (for example, such as a court verdict).
What are examples of contingent liabilities?
Examples Of Contingent LiabilitiesLawsuit.Product Warranty.Pending Investigation or Pending Cases.Bank Guarantee. ... Lawsuit for theft of Patent/know-how.Change of Government Policies.Change in Foreign Exchange.Liquidated Damages.
What is considered a contingent liability?
Contingent liability, sometimes referred to as indirect liability, is a responsibility that occurs based on the outcome of a particular event that provides coverage for losses to a third party for which the insured is vicariously liable.
What is the difference between a liability and a contingency?
Liability is accounted for immediately as you owe the obligation. Amount is recorded in books as accounts or notes payable. Contingent account is accounted for only when the obligation is probable and amount is estimated.
Is mortgage A contingent liabilities?
Contingent Liabilities In Mortgage Qualification exists when mortgage borrowers hold a joint obligation with another person. Examples include where the borrower is a co-applicant and/or co-signer.
What is the meaning of the word contingencies?
Definition of contingency 1 : a contingent event or condition: such as. a : an event (such as an emergency) that may but is not certain to occur trying to provide for every contingency. b : something liable to happen as an adjunct to or result of something else the contingencies of war.
Why is contingent liabilities not shown in the balance sheet?
The principle of full disclosure requires that all material and relevant facts concerning financial performance of an enterprise must be fully and completely disclosed in the financial statements and their accompanying footnotes. Hence, contingent liability is recorded in balance sheet as footnote.
What is the difference between a contingent liability and a provision?
Provision liability reduces an asset's value because of a present obligation arising out of a past event. Contingent liability is a potential liability that can occur at a future date due to events beyond a company's control. The event which can result in a provisional liability may or may not occur.
How is contingent liability shown in balance sheet?
A contingent liability is recorded first as an expense in the Profit & Loss Account and then on the liabilities side in the Balance sheet.
Is contingent liability a current liability?
Current and contingent liabilities are both important financial matters for a business. The primary difference between the two is that a current liability is an amount that you already owe, whereas a contingent liability refers to an amount that you could potentially owe depending on how certain events transpire.
How Does A Contingent Offer Work?
A contingent offer is an offer where you agree to buy a house if and only when your current home is for sale. With a contingent offer, you don't ha...
Can Sellers Consider Other Offers Even After they’ve Accepted A Contingent Offer?
Yes, sellers may consider other offers even after they have accepted a conditional offer. Having received a new offer that they liked, casual buyer...
Do Contingent Offers Come With A Deadline?
Contingent offers usually have a deadline. Buyers need to sell their current home before the deadline; otherwise the contingent offer will end. Aga...
Contingent Debt Definition | Law Insider
Examples of Contingent Debt in a sentence. Form S-3, Anadarko Petroleum Corporation Registration Statement for $650 million of Zero Yield Puttable Contingent Debt Securities (No. 333-60496).. However, the application of the Contingent Debt Regulations to instruments such as the New Senior Notes is uncertain in several respects, and no rulings have been sought from the IRS or a court with ...
Contingent payment debt instrument - Structured CDs - Intuit
I had a structured certificate of deposit (FDIC insured) tied to the performance of a market index. The payout of the CD was a "point to point" structure and had no interest payments during the 4 year term. For the past 4 years I was paying original issue discount interest (phantom interest) from f...
Final regs. on contingent payment debt instruments leave questions on ...
In June 1996, contingent payment debt instrument (CPDI) final regulations were issued under Regs. Sec. 1.1275-4.(1) Effective for CPDIs issued on or after Aug. 13, 1996, the regulations are the culmination of Treasury's repeated attempts to address original issue discount (OID) uncertainties created by debt instruments with contingent payments.
26 CFR § 1.1275-4 - Contingent payment debt instruments.
(ii) Comparable yield. The comparable yield for the debt instrument is equal to the value of the benchmark rate (i.e., the yield on 4-year Treasury bonds) on the issue date plus the spread. Thus, the debt instrument's comparable yield is 7.5 percent, compounded annually. (iii) Projected payment schedule. Y anticipates that it will have no gross receipts in 1997, but that it will have gross ...
Contingent Payment Debt Instrument Sample Clauses
Related to Contingent Payment Debt Instrument. Contingent Payment Notwithstanding anything in this Agreement to the contrary, if any of the Properties are sold by Buyer within twelve (12) months after the Closing Date, Buyer shall pay to Seller an amount equal to five percent (5%) of the Consideration allocated to such Property. The Deeds shall contain a deed restriction granting Seller the ...
26 U.S. Code § 1275 - Other definitions and special rules
Amendments. 2000—Subsec. (a)(1)(B)(ii). Pub. L. 106–554, in introductory provisions, substituted “subchapter L (or by an entity described in section 501(c) and exempt from tax under section 501(a) which would be subject to tax under subchapter L were it not so exempt)” for “subchapter L”.. 1990—Subsec. (a)(4), (5). Pub. L. 101–508 redesignated par. (5) as (4) and struck out ...
What is contingent debt?
A contingent debt is a debt owed to the creditor that depends on some event that hasn’t yet occurred. This includes a debt that may never arise because the event may not occur. Contingent debts are only identified when the contingency that creates the debt is probable and the amount of the liability can be estimated.
What is disputed debt?
Disputed. A debt is disputed when you and the creditor do not agree about the existence or amount of the debt. For instance, suppose you believe you owe Capital One $1,000 for a credit card debt, and Capital One asserts that you owe $2,000.
Why would you list a debt in your bankruptcy that may or may not arise?
Why would you list a debt in your bankruptcy that may or may not arise? Simple, a contingency debt means that certain obligations exist currently that may give rise to a debt in your future. In many cases you can discharge those obligations. For instance, suppose you have co-signed for a car loan for your brother-in-law. Even though you have no liability until your brother-in-law defaults (which may never occur), you may still discharge that potential liability during bankruptcy.
What does listing debt mean?
Listing the debt makes it eligible for inclusion in the bankruptcy discharge. It also alerts the bankruptcy trustee that the creditor may not be entitled to a full distribution of any estate assets.
Can you discharge a car loan if your brother in law defaults?
For instance, suppose you have co-signed for a car loan for your brother-in-law. Even though you have no liability until your brother-in-law defaults (which may never occur), you may still discharge that potential liability during bankruptcy.
Is unliquidated debt dischargeable?
Once the amount is clear and undisputed, the debt is “liquidated.”. Liquidated and unliquidated debts are often dischargeable during bankruptcy.
What is contingent obligation?
Contingent Obligation means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
What is identified contingent liability?
Identified Contingent Liabilities means the maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guaranties, uninsured risks and other contingent liabilities of the Borrower and its Subsidiaries taken as a whole after giving effect to the Transactions (including all fees and expenses related thereto but exclusive of such contingent liabilities to the extent reflected in Stated Liabilities), as identified and explained in terms of their nature and estimated magnitude by responsible officers of the Borrower.
What is a guaranty obligation?
Guaranty Obligation means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person for any Indebtedness, lease, dividend or other obligation (the “primary obligation”) of another Person (the “primary obligor”), if the purpose or intent of such Person in incurring such liability, or the economic effect thereof, is to guarantee such primary obligation or provide support, assurance or comfort to the holder of such primary obligation or to protect or indemnify such holder against loss with respect to such primary obligation, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of any primary obligation, (b) the incurrence of reimbursement obligations with respect to any letter of credit or bank guarantee in support of any primary obligation, (c) the existence of any Lien, or any right, contingent or otherwise, to receive a Lien, on the property of such Person securing any part of any primary obligation and (d) any liability of such Person for a primary obligation through any Contractual Obligation (contingent or otherwise) or other arrangement (i) to purchase, repurchase or otherwise acquire such primary obligation or any security therefor or to provide funds for the payment or discharge of such primary obligation (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the solvency, working capital, equity capital or any balance sheet item, level of income or cash flow, liquidity or financial condition of any primary obligor, (iii) to make take-or-pay or similar payments, if required, regardless of non-performance by any other party to any Contractual Obligation, (iv) to purchase, sell or lease (as lessor or lessee) any property, or to purchase or sell services, primarily for the purpose of enabling the primary obligor to satisfy such primary obligation or to protect the holder of such primary obligation against loss or (v) to supply funds to or in any other manner invest in, such primary obligor (including to pay for property or services irrespective of whether such property is received or such services are rendered); provided, however, that “Guaranty Obligations” shall not include (x) endorsements for collection or deposit in the ordinary course of business and (y) product warranties given in the ordinary course of business. The outstanding amount of any Guaranty Obligation shall equal the outstanding amount of the primary obligation so guaranteed or otherwise supported or, if lower, the stated maximum amount for which such Person may be liable under such Guaranty Obligation.
What is consolidated current liabilities?
Consolidated Current Liabilities at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries at such date, but exclu ding ( a) the current portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without duplication of clause (a) above, all Indebtedness consisting of Revolving Loans or Swingline Loans to the extent otherwise included therein.
What does "excluded Indebtedness" mean?
Excluded Indebtedness means all Indebtedness not incurred in violation of Section 6.01.
What is total fund Indebtedness?
Total Funded Indebtedness means, at any date, the aggregate principal amount of all Funded Indebtedness of Holdings and its Restricted Subsidiaries at such date, determined on a consolidated basis in accordance with GAAP.
What are current liabilities?
Current Liabilities means, with respect to the Borrower and the Subsidiaries on a consolidated basis at any date of determination, all liabilities that would, in accordance with GAAP, be classified on a consolidated balance sheet of the Borrower and the Subsidiaries as current liabilities at such date of determination, other than (a) the current portion of any Indebtedness, (b) accruals of Interest Expense (excluding Interest Expense that is due and unpaid), (c) accruals for current or deferred Taxes based on income or profits, (d) accruals, if any, of transaction costs resulting from the Transactions, (e) accruals of any costs or expenses related to (i) severance or termination of employees prior to the Closing Date or (ii) bonuses, pension and other post-retirement benefit obligations, and (f) accruals for add-backs to EBITDA included in clauses (a) (iv), (a) (v), and (a) (vii) of the definition of such term.
What is contingent debt?
Contingent debts are undefined liabilities, and is a debt that may or may not occur based on future events. This differs from unliquidated debts, which are owed based on the terms of an existing contract or dispute. Lastly, disputed debt is one that a creditor may say is owed, but you disagree. Below, we’ll further explain ...
What is an unliquidated claim?
With unliquidated claims, you know that you owe the debt, but are not sure exactly how much it amounts to at the time you prepare the bankruptcy petition. Examples include:
What to do if you are disputed on a credit report?
If any of your debts are disputed, list the amount the creditor is demanding instead of what you believe you may owe. This doesn’t mean that you are agreeing with their assessment: you just want to make sure that you get discharged from it at the end.
Can you file an unliquidated claim in bankruptcy?
Although you may not know exactly how much you will ultimately owe, including an unliquidated claim in your bankruptcy petition will help ensure that it gets discharged along with your other listed debts.
Do you have to list debts if you didn't incur them?
Regardless of the cause of the dispute, these debts must be listed, even if you know you didn’t incur them. What matters is that the creditor believes you do, and if it does turn out to be a valid claim, it can be included in the petition for a future discharge.
Can you file bankruptcy if you don't owe debt?
It sometimes happens that people file bankruptcy while in the middle of a dispute with one or more creditors. You may believe that the amount they are demanding is too high, or you may not even owe the debt to begin with. Regardless of the cause of the dispute, these debts must be listed, even if you know you didn’t incur them. What matters is that the creditor believes you do, and if it does turn out to be a valid claim, it can be included in the petition for a future discharge.
What is contingent debt?
Contingent Debt. definition. Contingent Debt means, with respect to any Person, without duplication, any contingent liabilities, obligations or indebtedness of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection ), including ...
What is contingent obligation?
Contingent Obligation of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership.
What is acquisition Indebtedness?
Acquisition Indebtedness means any Indebtedness of the Company or any Subsidiary that has been incurred for the purpose of financing, in whole or in part, a Material Acquisition and any related transactions (including for the purpose of refinancing or replacing all or a portion of any related bridge facilities or any pre-existing Indebtedness of the Persons or assets to be acquired); provided that either (a) the release of the proceeds thereof to the Company and the Subsidiaries is contingent upon the substantially simultaneous consummation of such Material Acquisition (and, if the definitive agreement for such Material Acquisition is terminated prior to the consummation of such Material Acquisition, or if such Material Acquisition is otherwise not consummated by the date specified in the definitive documentation evidencing, governing the rights of the holders of or otherwise relating to such Indebtedness, then, in each case, such proceeds are, and pursuant to the terms of such definitive documentation are required to be, promptly applied to satisfy and discharge all obligations of the Company and the Subsidiaries in respect of such Indebtedness) or (b) such Indebtedness contains a “special mandatory redemption” provision (or a similar provision) if such Material Acquisition is not consummated by the date specified in the definitive documentation evidencing, governing the rights of the holders of or otherwise relating to such Indebtedness (and, if the definitive agreement for such Material Acquisition is terminated prior to the consummation of such Material Acquisition or such Material Acquisition is otherwise not consummated by the date so specified, such Indebtedness is, and pursuant to such “special mandatory redemption” (or similar) provision is required to be, redeemed or otherwise satisfied and discharged within 90 days of such termination or such specified date, as the case may be).
What is relevant debt?
Relevant Debt means any present or future indebtedness in the form of, or represented by, bonds, notes, debentures, loan stock or other securities that are for the time being, or are capable of being, quoted, listed or ordinarily dealt in on any stock exchange, automated trading system, over-the-counter or other securities market.
What is Indebtedness for Borrowed Money?
Indebtedness for Borrowed Money means, with respect to any Person, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind , (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services or any other similar obligation upon which interest charges are customarily paid (excluding trade accounts payable incurred in the ordinary course of business), (e) all Indebtedness for Borrowed Money of others secured by (or for which the holder of such Indebtedness for Borrowed Money has an existing right, contingent or otherwise, to be secured by) any encumbrance on property owned or acquired by such Person, whether or not the Indebtedness for Borrowed Money secured thereby has been assumed, (f) all assurances by such Person of Indebtedness for Borrowed Money of others, (g) all capital lease obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.
What is long term Indebtedness?
Long-Term Indebtedness means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred, constituted) a long-term liability.
What does "excluded Indebtedness" mean?
Excluded Indebtedness means all Indebtedness not incurred in violation of Section 6.01.
What Is a Contingent Liability?
A contingent liability is a liability that may occur depending on the outcome of an uncertain future event. A contingent liability has to be recorded if the contingency is likely and the amount of the liability can be reasonably estimated. Both GAAP and IFRS require companies to record contingent liabilities.
Why are pending lawsuits considered contingent?
Pending lawsuits and warranties are common contingent liabilities. Pending lawsuits are considered contingent because the outcome is unknown. A warranty is considered contingent because the number of products that will be returned under a warranty is unknown.
What Are the 3 Types of Contingent Liabilities?
GAAP recognizes three categories of contingent liabilities—probable, possible, and remote. Probable contingent liabilities can be reasonably estimated (and must be reflected within financial statements). Possible contingent liabilities are as likely to occur as not (and need only be disclosed in the financial statement footnotes) and remote contingent liabilities are extremely unlikely to occur (and do not need to be included in financial statements at all).
Why are pending lawsuits and product warranties common contingent liability examples?
Pending lawsuits and product warranties are common contingent liability examples because their outcomes are uncertain. The accounting rules for reporting a contingent liability differ depending on the estimated dollar amount of the liability and the likelihood of the event occurring. The accounting rules ensure that financial statement readers receive sufficient information.
Does contingent liability apply to companies?
Contingent liability as a term does not apply only to companies, but to individuals as well. A contingent liability has to be recorded if the contingency is likely and the amount of the liability can be reasonably estimated.
What is contingent debt?
Contingent Debt. Debt is money borrowed with an expectation that it will be repaid in a specific period of time. In most cases, a document in the form of a loan note, a mortgage or a bond is proof of an existing debt and the terms under which it was given. While that kind of liability is certain, contingent debt is dependent on doubtful ...
Why is the payment of a debt not certain?
If two corporations or individuals are locked in a legal dispute over debt, for instance, the payment of such liability is not certain because the outcome of a court case might not be predictable. Advertisement.
Is it possible to foretell a debt that might or might not occur?
Just because it is not possible to foretell a debt that might or might not occur does not mean it should not be disclosed. Disclosure requirements exist. The debtor, or creditor, is supposed to take into account the probability of a contingent debt. Health insurance companies, for instance, usually have a rough idea of how much they will pay in ...
