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Related to Extinguishment: Early Extinguishment of Debt


The destruction or cancellation of a right, a power, a contract, or an estate.

Extinguishment is sometimes confused with merger, though there is a clear distinction between them. Merger is only a mode of extinguishment, and applies to estates only under particular circumstances, but extinguishment is a term of general application to rights, as well as estates. Extinguishment connotes the end of a thing, precluding the existence of future life therein; in mergers there is a carrying on of the substance of the thing, except that it is merged into and becomes a part of a separate thing with a new identity.

Two ways in which the extinguishment of a debt can occur are by release or by payment. Extinguishment of legacy takes place where what has been bequeathed by will ceases to exist. Extinguishment of rent may take place by the tenant purchasing the rented property from the landlord or by grant, release, or surrender of the rental agreement.


n. the cancellation or destruction of a right, quite often because the time for enforcement has passed. Example: waiting more than four years after the due date to make a demand for payment on a promissory note wipes out the person's right to collect the money owed to him/her. It can also occur by fulfilling the obligation so no further money or performance is due.

See: abolition, death, demise, deterrence, dissolution, end, extremity, termination

EXTINGUISHMENT, contracts. The destruction of a right or contract, the act by which a contract is made void.
     2. Art extinguishment may be by matter of fact and by matter of law. 1. It is by matter of fact either express, as when one receives satisfaction and full payment of a debt, and the creditor releases the debtor 11 John. 513'; or implied, as when a person hath a yearly rent out of, lands and becomes owner either by descent or purchase, of the estate subject to the payment of the rent, the latter is extinguished 3 Stew. 60; but the person must have as high an estate in the land as in the rent, or the rent will not be extinct. Co. Litt. 147. See Merger.
     3. There are numerous cases where the claim is extinguished b operation of law; for example, where two persons are jointly, but not severally liable, for a simple contract debt, a judgment obtained against one is at common law an extinguishment of the claim on the other debtor. Pet. C. C. 301; see 2 John. 213. Vide, generally, Bouv. Inst. Index, h.t.; 2 Root, 492; 3 Conn. 62; 1 Hamm. 187; 11 John. 513; 4 Conn. 428; 6 Conn. 373; 1 Halst. 190 4 N. H. Rep. 251 Co. Litt. 147 b; 1 Roll. Ab. 933 7 Vin. Ab. 367; 11 Vin. Ab. 461; 18 Vin. Ab. 493 to 515 3 Nels. Ab. 818; 14 Serg. & Rawle, 209; Bac. Ab. h.t.; 5 Whart. R. 541. Vide Discharge of a Debt.

References in periodicals archive ?
6 million extraordinary loss on the early extinguishment of certain Auto Haulaway long-term debt, net of applicable income taxes $2.
For the first nine months of fiscal 2004, net income after debt extinguishment and litigation settlement charges was $15.
Q3 Net income this year, without Brazil, the equity compensation relating to the change to the maximum performance level of restricted stock and without the charges related to the early extinguishment of debt charge, and without the tax on the dividend, would have been $0.
When a change in conditions results in extinguishment of a perpetual conservation restriction, the donee organization "must be entitled to a portion of the proceeds at least equal to the proportionate value" of the conservation restriction (Regs.
zero gain or loss recognized on the extinguishment of the obligation).
4 million extraordinary loss on early extinguishment of debt.
Extinguishment will be at the top of the agenda when Indian Affairs Minister Jane Stewart sits down face-to-face with representatives of the First Nations Summit in a meeting scheduled for early November.
In a batch mixer, mixing time (the complete dye extinguishment time of a mixed liquid in the mixer) is determined using this approach.
This error resulted from the fact that SNH recorded charges related to the early extinguishment of debt in the fourth quarter 2005 when $52.
The extinguishment of high-cost borrowings is expected to increase the Company's net interest margin and net interest income compared to what we otherwise would have experienced.
As a result, will A have to realize the extinguishment of the debt as cancellation of debt (COD) income?
07 per diluted share after tax impact of SFAS 123(R) and debt extinguishment expense of approximately $0.