eli5: How does it work when a company is sued for millions of dollars? do they actually pay that out in cash/stock/etc..

Question

eli5: How does it work when a company is sued for millions of dollars? do they actually pay that out in cash/stock/etc..

In: 13

Answer 1

If they lose and a judgement is entered against them, they need to pay that judgement (assuming no appeal is taken or the company loses on appeal). Usually that’s done through a check or some sort of wire or electronic funds transfer. If the company needs to borrow funds or sell assets to raise the cash, so be it. But plaintiffs (and their lawyers) want cash. In extraordinary circumstances, different arrangements might be made, but those are exceedingly rare. Checks and bank transfers are used to pay judgments almost exclusively.