After-Acquired Clause

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After-Acquired Clause

In bond indentures and mortgages, a clause stating that assets acquired after the contract comes into effect may be regarded as additional collateral for the debt. For example, if a person buys a second house after taking out a mortgage on his/her primary house, the mortgage lender may regard the second house as extra security in the event of default. The after-acquired clause exists to provide additional protection to the lender to ensure that secured debts are paid.
References in periodicals archive ?
ACA is concerned that if Gray can assert that it owned the Raycom stations to be divested for even a minute, such a scenario could trigger what are called "after-acquired clauses," which are contract provisions that could automatically escalate retransmission consent payments for certain stations and with certain MVPDs.
Second, Gray's divestiture plans themselves raise concerns similar to those raised in the Sinclair-Tribune proceeding about how such divestitures would impact so-called "after-acquired clauses." ACA calls on the Commission to prohibit Gray from triggering any after-acquired station clauses in retransmission consent agreements with MVPDs for acquired stations it commits to divest."
ACA argues that retransmission consent payments would rise "because the completion of the Sinclair-Tribune merger would trigger after-acquired clauses in MVPD retrans agreements that generally mean paying higher Sinclair rates." Additionally, ACA believes "the massive new entity would also use its leverage to force carriage of programming that MVPD consumers do not want, resulting in higher prices and fewer choices for consumers."