Rights of set-off

(redirected from Right of Set-Off)

Rights of set-off

An agreement defining each party's rights should one party default on its obligation. A setoff is common in parallel loan arrangements.

Rights of Set-Off

A portion of a loan agreement stating the rights of each party should one party or the other default on his/her obligations. Rights of set-off are most often stated explicitly when two parties are lending money to each other. See also: Parallel loan.
References in periodicals archive ?
To make it clear to persons responding to a call or request from the City that the Chief Financial Officer and Treasurer may choose to exercise any legal or equitable right of set-off against any person who becomes indebted to the City during the provision of their services and may re-direct payments to otherwise due to such person towards repayment of outstanding amounts owed to the City.
As consideration for American CuMo's waiver of costs in accordance with paragraph 2, IEMR HK will permit American CuMo to set off any future costs award made by the Court against IEMR HK in favour of American CuMo against the amounts owing under the Notes and Security and the letter setting out the terms of the agreement shall constitute an amendment in writing of the Notes and Security to allow for this right of set-off.
The amount payable may be reduced if the Bank has any contractual right of set-off against the account.
The boards are proposing that offsetting should apply only when the right of set-off is enforceable at all times, including in default and bankruptcy, and the ability to exercise this right is unconditional, that is, it does not depend on a future event.
The warning signs noted in the state's press release are: 1) agreements where you waive your right to take legal action against the servicer or to take action challenging the foreclosure process (watch for words such as "borrower has no right of set-off or counterclaim" or "no defense related to the loan or the property"); 2) demands for advance payment of extra fees not included in the agreement, such as taxes, attorney fees and insurance costs; 3) failure to return your calls or respond to inquiries in a timely manner; 4) failure to respond to you entirely; or 5) lost documents.
Apart from other inconsistencies, the laws do not provide the right of set-off to the employers against those increases.
Under FIN 39, organizations may offset the on-balance-sheet assets and liabilities of multiple derivatives contracts with a single counterparty and report the net amount only when the right of set-off is legally enforceable.
It is important to note, though, that courts will respect the landlord's right of set-off with respect to security deposits or prepaid rent which were at one time commingled, but are later segregated by the landlord if (a) such segregation occurs Prior to an assignment for the benefit of creditors or the commencement of a bankruptcy proceeding and (b) the landlord's commingling was inadvertent as opposed to a deliberate disregard of the law.
The Board of Directors is entitled to appoint one or more special auditors or a registered auditing company to examine any reports or plans prepared by the Board in accordance with the Swedish Companies Act in conjunction with any new issue of shares, warrants or convertible bonds that includes stipulations regarding contribution in kind or that subscription shall take place by virtue of a right of set-off or under other terms and conditions, a transfer of the company's own shares in return for non-cash consideration, a reduction in the share capital or the statutory reserve, a merger or a division of a limited company.
The Board of Directors shall have the right to resolve that the shares and/or the convertibles shall be paid in kind or otherwise be subject to conditions referred to in Chapter 2 Section 5 second paragraph 1-3 and 5 of the Swedish Companies Act or that the shares and/or the convertibles shall be subscribed for with a right of set-off.
The board of directors proposes that the general meeting extend the authorization given to the board of directors at the annual general meeting in 2006 so that the board of directors, for the period up until the next annual general meeting, is authorized to resolve on new issues, on one or several occasions, with or without deviation from the shareholders' preferential rights, of up to 27,000,000 shares (which is equivalent to a dilution of up to 10 per cent), against payment in cash, in kind and/or with a right of set-off or otherwise on conditions.
The Board shall have the right to resolve that the shares and/or the convertibles shall be paid in kind or otherwise be subject to conditions referred to in Chapter 2 Section 5 second paragraph 1-3 and 5 of the Swedish Companies Act or that the shares and/or the convertibles shall be subscribed for with a right of set-off.