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Liability: Difference between revisions
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===Payment of liabilities out of own funds=== | ===Payment of liabilities out of own funds=== | ||
You may occasionally see a covenant from an [[espievie]] to its security trustee as follows: | You may occasionally see a covenant from an [[espievie]] to its security trustee as follows: | ||
{{quote|'''[[Payment of Liabilities]]''': at all times pay its liabilities out of its own funds or procure payment of such liabilities by other persons out of moneys owing to it.}} | {{quote|'''[[Payment of Liabilities]]''': at all times pay its liabilities out of its own funds or procure payment of such liabilities by other persons out of moneys owing to it.}} | ||
This seems to be as close to canonical as anything in the repack canon, but it hardly stands up to close scrutiny. What does it even mean? Is it a simply covenant to its trustee perform its contractual obligations to others? On what planet would a security trustee be animated or proactive enough to take upon itself the job of enforcing some other fellows entitlement, if the fellow was not inclined to do so herself? And for what? Or is it meant to ''constrain'' how the issuer discharges its liabilities to others; to proscribe the manner in which it discharges its debts? In which case, how else could it meet its liabilities other than from funds it holds or which are owed to it, without committing aggravated robbery? | |||
{{sa}} | {{sa}} | ||