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Simple English definitions for legal terms

negative-pledge clause

Read a random definition: propter honoris respectum

A quick definition of negative-pledge clause:

A negative-pledge clause is a rule that says if someone borrows money without giving something valuable as security, they cannot give anything valuable as security to someone else without asking the first lender first. It can also be a rule in a contract that says a company cannot use its things as security if it will make the people who lent it money less safe.

A more thorough explanation:

A negative-pledge clause is a provision in a loan agreement or bond indenture that restricts the borrower or issuer from pledging any assets as collateral to another lender without the consent of the first lender or bondholders.

Suppose a company borrows money from Bank A without providing any collateral. The loan agreement may include a negative-pledge clause that prohibits the company from pledging any assets as collateral to another lender without Bank A's permission. This clause protects Bank A's interest in the loan and ensures that it has priority over any other lenders.

A bond indenture may also include a negative-pledge clause that restricts the issuer from pledging any assets as collateral to another lender if it would result in less security for the bondholders. For instance, if a company issues bonds and pledges its assets as collateral to another lender, the bondholders may have less security in case of default. The negative-pledge clause ensures that the issuer cannot take any action that would jeopardize the bondholders' interests.

These examples illustrate how a negative-pledge clause protects the interests of lenders and bondholders by restricting the borrower or issuer from pledging any assets as collateral to other parties without their consent. This clause ensures that the lender or bondholders have priority over other creditors and that their interests are safeguarded.

negative plea | negative prescription

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General

General chat about the legal profession.
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medicine is a scam
join the ethically ambiguous legal field instead
Dkk
18:57
I want to meet an attorney that defends clients who run into flat earth problems. I want an attorney that knows and believes in flat earth theory.
19:05
i want a flat earther for president. i want a guy who posts on 4chan for president. i want someone who mogs for president.
Dkk
19:18
Exactly. My version of that awful poem.
Dkk
19:19
I can accept a president with maybe one or two of the poems traits hut good God, all of them??? No ty.
windyMagician
19:20
president who respects sex is crazy
windyMagician
19:20
we had bill clinton already
Dkk
19:21
Bill Clinton, first and last black president
windyMagician
19:23
I want to go running but my leg feels weird
windyMagician
19:23
it doesn't hurt its just tingly
Dkk
19:26
It needs more alcohol. You tingle when your nerves need watering.
19:27
try stretching it maybe to see what's up
windyMagician
19:27
stretches make me think it's just soreness
windyMagician
19:27
I'm sober lol
Dkk
19:38
Anyone else get the google notification that your LSD password has been compromised lol. LSD got hacked.
20:48
what.jpg @Dkk
CynicalOops
21:03
You think you just fell out of a coconut tree?
jackfrost11770
21:10
nope dk
CynicalOops
22:37
Calvinamala Harris
jackfrost11770
23:16
should i start using letterboxed again
Dkk
23:25
@jackfrost11770: if you want but like it aint for me
dk do u ever eat at bk
Dkk
23:48
@chickenburgahfart: I would do that in the Army if really desperate for food or if I had to work through lunch. One of the few fast food places I go to.
bk so slept on
Dkk
0:23
I will take In N Out everyday over it when I can though.
texaslawhopefully
1:22
In N Out is not only the best fast food place, but the prices too are fantastic
Dkk
1:27
Indeed, indeed.
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