pledge

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pledge

1. Law a person who binds himself, as by becoming bail or surety for another
2. take or sign the pledge to make a vow to abstain from alcoholic drink

Pledge

 

in civil law, a means of securing the performance of obligations, whereby property of a certain value is transferred to a creditor. In the event that the debtor does not fulfill the obligation secured by the pledge, the creditor has the right to satisfy his claim from the value of the property pledged in preference to other creditors. In the USSR, obligations of both citizens and socialist organizations may be secured by pledges. A pledge may be provided for by law or by contract (a pledge contract must be concluded in writing). The object of a pledge may be any property subject to execution by law. Therefore, the fixed capital of state organizations, the seed and fodder of collective farms, of other cooperative organizations, and of associations of cooperative organizations, and the fixed assets and cultural and educational resources of trade unions and other public organizations may not be objects of a pledge.

In practice three types of pledges are used. In the so-called normal conventional pledge the pledger transfers the object of the pledge to the pledgee, for example, when a loan is made by a pawnshop. In a pledge of goods in circulation, by virtue of which the pledged property remains in the possession of the pledger, he has the right to realize this property on condition of simultaneously repaying the debt that was secured by the pledge or on condition of replacing the property with another of the same or greater value. In pledges on goods that are in the process of being manufactured, by virtue of which the pledged property remains in the possession of the pledger, the pledged property may be processed in the pledger’s enterprise. In this case, the statutory pledge extends to the products (semifinished goods, finished articles) that result from this processing. A pledge of goods in circulation and of goods that are in the process of being manufactured is used in securing the credit obligations of socialist organizations in connection with bank loans. The pledger is under obligation to ensure the safety of the pledge property.

E. G. POLONSKII

References in periodicals archive ?
On the life insurance side, according to a NAIC color-coded chart about 31 percent of companies had a percentage of pledged assets as of year-end 2011, higher than the other insurance sectors of P&C (about 20 percent), health (about 10 percent), title (about 10 percent) and fraternal a small universe of 14 companies where 10 had no assets pledged.
The ability to pledge collateral enhances a firm's debt capacity, and providing outside investors with the option to liquidate pledged assets acts as a strong disciplining device on borrowers.
" There is a possibility of the foreign creditors having the first claim over the pledged assets of the company, leaving the domestic banks in the lurch," she added.
Kuwait, 24 August: Kuwaiti local banks are facing no pressure from the Central Bank of Kuwait (CBK) to liquidate pledged assets, Kuwaiti Banking Association (KBA) Chairman Abdelmajid al-Shatti said here Monday.
Preparers often struggle with the level of detail to provide in note disclosures of pledged assets and other collateral arrangements.
Amiri co-founder Richard Ellis told Reuters that Gulf-based investors have pledged assets to the fund of funds but investments will be made when the market shows signs of improvement.
465(c)(1) could increase their at-risk amount by borrowing funds from anyone, as long as the taxpayer/borrower was personally liable for loan repayment or had pledged assets as security.
Furthermore, governments and their depositories must mark to market the pledged assets (mark-to-market is a periodic adjustment of the book value of a security to reflect its market value).
In addition, IBRA held pledged assets valued at $2.6 trillion from the Sinar Mas Group, the parent conglomerate for Asia Pulp & Paper.
Examples include new corporate debt, most sales of corporate assets, and the use of pledged assets.
The secured creditors may have restrictions imposed that limit their ability to attach the pledged assets - bad for the creditor, but good for the business as it tries to recover.
The PASR, an asset-to-liability ratio, is calculated by dividing the amount of aggregate pledged assets, including scheduled obligor repayments, reserve funds and account earnings, by aggregate outstanding debt service.