Legal Definitions - funded

In a legal and financial context, the term funded refers to the state where sufficient financial resources have been allocated, set aside, or committed to cover the costs or obligations associated with a particular project, program, liability, or entity. When something is funded, it means the necessary money is available or guaranteed to be available to meet its financial requirements, often implying that the financial provision is adequate to fulfill its purpose.

• Example 1: A Government Infrastructure Project

  A state legislature approves a new highway expansion project estimated to cost $500 million. To proceed, the project must be funded. This means the state government has identified and secured the $500 million, perhaps through a combination of state bonds, federal grants, and dedicated tax revenues, ensuring the money is available to pay contractors and acquire necessary land.

  This example illustrates "funded" because the financial resources (bonds, grants, taxes) have been specifically allocated and secured to cover the entire cost of the highway project, making its completion financially viable.

• Example 2: An Employee Benefit Trust

  A company establishes a trust to provide post-retirement healthcare benefits for its employees. For this trust to be considered funded, the company must regularly contribute assets (like cash or investments) into the trust, ensuring that there will be enough money available in the future to pay for the healthcare costs of its retired employees as they arise, rather than paying out of current operating income.

  Here, "funded" means that specific financial assets have been set aside and managed within the trust to meet future obligations, providing a secure source for the promised benefits.

• Example 3: A Legal Settlement Account

  Following a major product liability lawsuit, a manufacturing company agrees to pay $100 million in damages to affected consumers. As part of the settlement agreement, the court orders the company to fund a special escrow account with the full $100 million within 30 days. This ensures that the money is immediately available for distribution to the claimants, rather than relying on the company's future ability to pay.

  This demonstrates "funded" because the entire settlement amount has been deposited into a secure, dedicated account, guaranteeing that the financial obligation to the claimants can be met without delay or further risk.