Supersedeas Bond
A bond posted by a judgment debtor to suspend (supersede) execution of the judgment during the pendency of appeal. Texas supersedeas is governed by Tex. R. App. P. 24 and Tex. Civ. Prac. & Rem. Code § 52.006. The amount generally equals the compensatory damages awarded, interest for the estimated duration of the appeal, and costs, capped under § 52.006 at the lesser of (a) 50% of the judgment debtor's net worth or (b) $25 million. The statutory net-worth cap protects against confiscatory bonds.
A supersedeas bond is a bond posted by a judgment debtor to suspend (supersede) execution of the judgment during the pendency of appeal. Without supersedeas, the judgment creditor can generally obtain execution 30 days after the judgment is signed (or after a timely motion for new trial is overruled), or sooner on the affidavit Rule 628 requires, garnishing accounts, foreclosing on assets, conducting turnover sales, even if appeal is pending. The supersedeas bond is the price of staying execution during appeal. Texas supersedeas practice is governed by Tex. R. App. P. 24 and Tex. Civ. Prac. & Rem. Code § 52.006, with statutory net-worth caps protecting against confiscatory bond requirements.
Standard supersedeas amount
Rule 24.2(a)(1) sets the standard supersedeas amount at the sum of: (1) the amount of compensatory damages awarded; (2) interest for the estimated duration of the appeal; and (3) costs awarded. Punitive damages are excluded from the calculation. Rule 24.1 permits a written agreement with the judgment creditor, a surety bond, a deposit in lieu of bond (cash, a cashier's check or, with leave, certain negotiable obligations), or alternate security under Rule 24.2(e) or ordered by the court.
Statutory net-worth cap, § 52.006
Section 52.006 imposes a critical cap on supersedeas amounts: the bond may not exceed the lesser of (a) 50% of the judgment debtor's current net worth or (b) $25 million. This statutory cap protects against confiscatory bond requirements that would prevent appeals by judgment debtors with limited net worth. A judgment debtor who posts security based on net worth must file with it an affidavit stating net worth and giving complete, detailed information about assets and liabilities. The affidavit is prima facie evidence of net worth. The judgment creditor may contest the affidavit and take reasonable discovery. The trial court must then hear the contest, the debtor bears the burden of proving net worth, and the order must state net worth and its factual basis with particularity.
Reduction motions
The judgment debtor may seek further reduction of the supersedeas bond by motion under Rule 24.2(b). After notice to all parties and a hearing, the trial court must lower the amount to one that will not cause the judgment debtor substantial economic harm if it finds that posting the required amount is likely to cause that harm (Rule 24.2(b); § 52.006(c)). Separately, a judgment debtor with a net worth under $10 million that shows the required amount would force it to substantially liquidate property necessary to the normal course of its business is entitled to post alternative security with a value sufficient to secure the judgment (§ 52.007; Rule 24.2(e)).
Trial court vs. appellate court jurisdiction
Supersedeas determinations are typically made initially by the trial court, with the trial court retaining limited jurisdiction over supersedeas issues during the pendency of appeal. The appellate court has authority to modify supersedeas requirements on motion under Rule 24.4. A party seeks review by motion in the court of appeals under Rule 24.4(a), and the court of appeals' ruling may be reviewed by mandamus in the Supreme Court. In re Smith reviewed a net-worth ruling for abuse of discretion.
Effect of supersedeas
Once supersedeas is posted in proper form and amount, the judgment creditor cannot execute on the judgment during the pendency of appeal, no garnishment, no turnover, no foreclosure. Post-judgment interest continues to accrue at the rate determined under Tex. Fin. Code Ch. 304. Under Rule 24.1(d), the surety or security is liable, up to its amount, if the debtor does not perfect an appeal or the appeal is dismissed and the debtor does not perform the judgment, or if the debtor does not perform an adverse judgment final on appeal.
Strategic considerations
Supersedeas is a critical strategic decision in post-judgment posture: (1) cost-benefit analysis, surety bond premiums plus collateral requirements vs. risk of execution during appeal; (2) likelihood of reversal, supersedeas makes most sense when the judgment debtor has substantial appellate prospects; (3) asset protection, supersedeas prevents the judgment creditor from reaching assets during appeal, even if the debtor ultimately loses; (4) settlement leverage, debtors who can post supersedeas often negotiate from stronger positions than those who cannot. Inability to post supersedeas can effectively force settlement on terms unfavorable to the judgment debtor.
For Texas judgment debtors weighing an appeal, the security calculation is usually the first financial question. Because the net-worth affidavit must be filed with the security, the financial information behind it is often assembled before judgment. A trial court may enjoin a judgment debtor from dissipating or transferring assets to avoid satisfaction of the judgment, though not from using assets in the normal course of business (§ 52.006(e)). For judgment creditors, the net-worth contest and objections to the type of security are the main tools at this stage, and the outcome can affect settlement talks.